It really depended on the circumstances. Being punk itself wasn't forbidden (though it could get you in trouble with schools or employers since in many contexts the look was still a very scandalous thing). Generally, in the mid-late 80s, in the whole East German system became a lot more lax, they also started easing up on travel restrictions at the time, so a lot more people got to travel into the West for example, there were big concerts by Western artists like Bruce Springsteen etc.

But obviously, punkness often comes along with a general fuck-the-authorities attitude and that in turn made punks more likely to be controlled (kinda like even today a police officer will be MUCH more likely to search a punk for drugs compared to a suit-wearing banker). In general, the government was not too thrilled about that attitude.

This specific guy was an artist/photographer who at the time did photography for an East German fashion magazine, so he had more leeway than most.

Source: both of my parents were punks in East Berlin and my aunt actually knew this guy quite well

Yesnt. They kept an eye on it and it certainly was controlled but outside of definitely having your face in some government files you wouldn't have been arrested as long as you didn't draw any attention (eg. political activism) to yourself. They were more concerned about so called anti socials and troublemakers and trying to hold their state together