There's not that much plot to Katzelmacher, but it's interesting the way it is. We're kind of looking at the late 60's German equivalent of what we might've seen in the 90's with certain movies (Clerks, the Linklater efforts, Kids) where we just see people hanging out and talking, but never about things that will really change their lives or affect them. This is accurate to disaffected youth, though Fassbinder makes it a little sexually charged here and there - nothing explicit, but there are some relationships that have fits and starts, mostly fits - and a 'new' person. A Greek man comes as a newcomer, and he's not really welcome. This makes up the conflict, though it doesn't seem that way at first.
It's tough to fully recall why the group turns on this Greek guy - maybe he said something or did something that made them turn, or it was his funny accent or way of speaking (I certainly remember the latter as it was one of those things that stuck out) - but the point is clear. Alienation drives so many of Fassbinder's story, and it's not simply the characters but the style itself here that gives off an alienating vibe. We see many shots that are just static on these guys (Fassbinder being one of them in the cast) hanging around, sitting down, smoking, talking, aimless, and then it'll cut to a shot of two women walking and talking in an apartment complex, and these are the only shots where music comes up (the same tinny piano music, by the way). It's in this atmosphere, in black and white no less, that things that look AND feel the same all the time can get disrupted by just one character.
I don't know if this is really among the director's best, and it's best I think to look at it as an early experiment. Certainly things he's dealing with here he'd explore throughout the rest of his career. It's not particularly engaging in the way of A-B-C unfold. You're just watching this very slow moving car wreck that's unfolding in a way that doesn't seem like it. Again, akin to one of those low-key character studies that would pop up in American independent cinema decades later. But it is interesting, for what it is, especially if you can be open to its intended aim of being *about* aimlessness and the way that underneath that is a lot of darkness.