You can`t ignore that it is possible to own all that lands with any in-hre tag. Besides, you will probably beat emperor more than once in war to get there.
So, that you are the "king of Germany" is fiat acompili, and emperor has to adjust, no metter what title you carry. That, is what the mechanic has to account for, not the arbitrary name of the state.
There is even no requrement for emperor to even be powerfull. Emperor can be as powerless as emperor of Japan, and your state can be as powerful as shogunate, and the emperor is just a puppet of yours, for the time it takes your family to bribe, threaten and force-marry yourself into position of being de-jure emperor.
That, in fact, is also a very good thing, that exists in the game, but PI wants to pull out for no reason.
King of Germany can be "de facto" emperor, but the empire still exist under the the de-jure HRE emperor, who is powerless, but exists as a formality, nontheless.
Again, if there is a Germany tag in game, it doesn`t have to be exclusive with existance of HRE. On contrary, it is great to have both, so it is possible for emeperor to not be the most powerfull in HRE, but for empire to exist.