IMO the 5% rule is pretty good.
Otherwise we would have loonies like the Grey Panthers (old people party), the “Spiritual Party”, or the extreme right-wing “Republicans” (AFD is moderate compared to those) being able to vote on laws etc.
Of course that also cuts out some parties that I have supported in the past, but the system allows a lot of parties to participate that aren’t _that_ populist (e.g. the Greens, the Left, the Pirates (I think they managed to get a seat or two in the past))
Of course it’s not perfect, but I still think it’s one of the best flawed systems we came up with so far. We should keep iterating on it but very slowly and carefully.
I would consider a world in which loonies have a couple insignificant seats in parliament to be a more democratic system than one that shuts them out.