I think I found the talk I got most of the info from [0]. The interesting parts about the law and how it was abused start roughly at 25:03, though unfortunately it's only available in German (Edit: turns out it actually does have an English audio track).
A very short summary: the law is only supposed to be used for very severe crimes and only if the investigation would otherwise be significantly more difficult or impossible. Also the owners of the tracked phones have to be notified of the tracking as it is a violation of the person's rights. In reality (at the date of the talk) it had never been used for terrorism, about 5% of the time for crimes like murder and in over 70% of the time for theft (including a case of stolen empty beer barrels), and nobody was ever notified.
[0] https://media.ccc.de/v/35c3-9972-funkzellenabfrage_die_allta...
