It is true that Germain is only half here. He probably made some kind of deal in which his physical body would be out of phase with time, but his soul wouldn't and would be allowed to travel through time. However, in return for this he probably had to agree not to interfere in matters of fate. In other words, he can't advise someone in a way that would alter their fate/destiny.
As for how he could fight Hecter, Zead/Death likely set up a barrier that traps beings that are out of phase with time. However, Germain didn't realize this until Hecter arrived. As for the fight, he was probably testing Hecter like some other characters do in other games. Though Germain did interfere with Hecter. Think about it. First he pleads with Hecter to stop pursuing Issac and then after the fight, Germain tells Hecter that he feels a new destiny flowing out of him and to walk the path that he is already on.