Was return to castle wolfenstein ever released in Germany or Austria?

I can't speak for Austria, but Return to Castle Wolfenstein was indeed released in Germany, though it was "indexed".

golem.de

Deutsche Version von Return to Castle Wolfenstein indiziert

Translation:

German version of Return to Castle Wolfenstein indexed

This means that while the game could be legally sold, it couldn't be done openly. Any copies for sale had to be hidden from the public, and customers had to specifically ask for the game and prove they were old enough to play it. This led to the following:

• People may not be aware the game exists or that it has been released.
• Even if people know the game has been released, they may not know where they can buy it.

As a result, many stores preferred not to sell indexed media, as they couldn't advertise them, which made selling them more difficult. This also led to the popular belief that "indexed media can't be sold", which is not entirely correct (they can be sold), but also not entirely wrong (many choose not to).

In addition to that, the German version was censored:

Die Originalversion des Spiels enthält aufgrund seiner Thematik sehr viele nationalsozialistische Bildinhalte. [...] Alle entsprechenden Symbole wurden für die deutsche Version entfernt oder modifiziert

Translation:

Due to its theme, the original version of the game contained a lot of Nazi imagery. [...] All such symbols were removed from or modified for the German version.

So, yes, Return to Castle Wolfenstein was indeed released in Germany (albeit censored), but most people never knew, as the game could not be advertised publicly.