Wow. Ok this was new to me. Thank you very much.
I never heard of these things in north germany where i am from. Almost all exclusivly lutheran here.
It's still used (infrequently) by several of the (40+) Lutheran synods in the US. I've been aware of confession being available in LCMS and WELS parishes, due to friends in parishes of one or the other. The diversity in doctrine and praxis of the various Lutheran denominations is quite wide, especially in nations where no one Lutheran denomination is state approved church, let alone a national official church.
I suspect, however, game use of the Lutheran praxis should be kept to a level that won't cause verisimilitude issues - especially if you've Lutheran players.
It's also worth noting that leaving Lutheranism for Catholicism was decriminalized historically in 1860, and travellers who were Catholic¹ or Old Catholic² were allowed since the late 18th C, so, if your players are uncomfortable with a "Catholic-Light" Lutheran Church, you can have parishes of those denominations providing the confessional without being too ahistorical.
¹: as in, in communion with Rome, aka Papists
²: Union of Utrecht. Which, when the Nederlands became protestant, broke ties to Rome. Still exists as a denomination.