Take the following with a big spoon of salt, since I am not a lawyer. Those are the results of interest and some reading on that topic.

Insulting someone is illegal in Germany (§ 185 StGB). You can get financial penalties and in worst cases some jailtime. However, if you insult someone back immediately, those can cancel each other out and the judge can exempt both of you or one of you from punishment (§ 199 StGB). Furthermore, since it is considered a crime, you could, theoretically, detain the culprit in case they want to flee until you are able to get some identification on them, i.e., see their ID card, or until someone like the police arrives (§ 127 StPO). Also this is not okay if you already know the person or have easy means to determine their ID (e.g., your neighbour or someone working at a facility you visit). In all cases the proportionality of your actions are important. (Beating someone senseless just to detain them, because they called you an avocado in a mean way is certainly not okay. This might be slightly different however, if the person in question commited a violent crime and is still acting violently.)