Text variant vs font switch - bfseries

The German module for babel makes " into a shorthand. This shorthand is implemented as a one-argument macro, because it's necessary to know what comes along and decide what to do: for instance "a will produce “ä”, "s yields “ß” and "| disables a ligature at the spot.

In the case of "{...}, the entire contents inside the braces is the argument, which obviously doesn't match any of the predefined shorthands, so LaTeX will deliver a standard double quote (precisely, the character in the ASCII position of " in the current font) and the tokens grabbed as an argument, but with braces removed (this is a low level TeX feature).

Thus what happens is that the braces are interpreted as the delimiters for an argument, not as group delimiters. Since they're removed, boldface goes on forever.

If you want German style quotes, use