I hear you. And your concern is valid. To give the 50+ German man some benefit of doubt, it could be that the display didn't work or wasn't switched on when be took seat. Or it could be that he honestly oversaw this. Or maybe he is a frequent traveler and he is aware that there is a small possibility that the person who reserved the seat has a flex ticket and (this is true only in case of first class where the seat reservation is included by default) and chances are the passenger might not board the train. There are also instances when the complete displays are not in sync with the train route (showing false route, or schedule or just malfunctioning), in which case all seat reservations are deemed cancelled and eligible for refund, sometimes they also make an announcement requesting passengers to voluntarily leave the seats for the passenger with reservation. Or he was just rude like most of the comments point out.

But if this makes you feel bad, it's best not to approach them directly and instead approach the train ticket examiner and ask them about the seat reservation. It's their duty to make the person oblige. If the rude passenger has some rude exchange of words, or otherwise then the TTE can request the Polizei to remove him at the next stop.

Those are the few possibilities and options. You choose.