From experience I suspected it to be a simple ASCII/UTF-8 problem, so I searched in the program package and found the file german.tvpaint.loc in the data folder. Sure enough it had all wrong characters instead of the right ones, like fl for ß and so on. But it also used the ß as a special character:
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$00040 "ß" character used for separating fast and full Inline help
TVP now shows the correct Umlaute everywhere. There also seem to be some typos in the menus which I will fix over time.