I'd stop it, it can become an obssession with him. I know of a rescue that came to the shelter as as stray with a stubby tail. After he was in foster it was discovered he was a tail chaser, chewer. Still working on his issues.
There is a recent thread on tail chasing, anal gland expression may help him, or it could be that he needs more outlets for his energy. Another cause could be he is out of alignment and his spine or tail is giving him pain.
You might want to have a vet or groomer check his anal glands, when they become full it's irritating and itchy. If that's not a problem I would suggest you redirect him to a toy or other activity- gsds tend to be genetically prone to obsessive tail chasing or other behaviors.
This is exactly how my oldest dog Apollo is. I adopted him 5 months ago and he came with a docked tail just because of that issue. Apollo has an extremely high prey drive and when he's not being worked with mentally he is taking his anxiety out on his tail. He can't reach his tail anymore but still, when he is anxious it's one thing he can turn to. I have been taking him to a trainer and we are working with him to get him to stop. So far it's working.