I’ve seen theories that someone in town felt Narfi was better off dead with all that happened to him

Lore wise though it’s done to prevent nature from becoming unbalanced. For the most part they only hunt as needed, and the parts are all used for crafting, food, and the like.

It’s revealed that Karl’s actually German himself in 5. He wasn’t living in Germany when the war broke out and conscripted with the allied forces.