Single-family house - is a discount over 10% realistic?

The discount is too high. Would go with the builder who made you a good initial offer.

Additionally, he added more services for free on top (e.g., floor plan enlargement, better insulation, electric shutters, ...), to match the scope of services of the competitor.

What price per sqm does it ultimately come out to? Which energy saving ordinance?

What is the final price per sqm? Which Energy Saving Ordinance?

1800 EUR per sqm KfW55 The price per sqm in the first offer (before the discount) was still about 2150 EUR

1800 EUR per sqm
KfW55

In the first offer (before the discount), the price per sqm was still about 2150 EUR

For which district?

For which district?

Leipzig

we requested bids from several GCs for the construction of a single-family house. One of the losing bidders has now massively improved their offer again and offered us more than 10% discount to undercut the competing offer.

At this point in reading, I just wanted to advise getting the completion guarantee double stitched, glued, screwed, riveted AND welded, because the question

Is something like this even realistically possible, or do you end up paying a very good price with poor quality [...]?

in my opinion was already clearly answerable: seriously, no way, realistically only with a blind eye turned. Only on the point of "botched work" would I have given "all clear," because you simply cannot leave out that much steel in the concrete to make up for the discount ;-) The next paragraph

Additionally, he added more services for free on top (e.g. floor plan enlargement, better insulation, electric shutters, ...), to match the scope of the competitor. I think all in all, the discount is about 15...20%.

sounds to my ears even more dramatic: namely like a drowning man who has a massive liquidity problem and urgently needs fresh snowball money to delay insolvency. For this, I see in my mental cinema a close-up of a toothpaste smile and the most leased Cayenne in the world (Panamera also works). By the way, it would NOT be a contraindication if the most generous payment terms (move in first, pay later) were added. And not one, not two, but three years of warranty extension ;-) Also in special colors, at no extra charge!