Bit late to the party, but:
freelance only 2-3 hours weekly, you don't have to pay health insurance for that
Essentially yes: If you pay compulsory health insurance on your main job, that also covers a side job. This is even true if you freelance besides being househusband while covered by the family insurance.
Ask your health insurance about the exact limits, but IIRC 20 h/wk (15 h/wk if officially unemployed) is one. Below 400 EUR/month you'd anyways be like a mini jobber which can be done as side line.
work too little, it is considered a hobby and you cannot deduce expenses
That refers to income tax. I believe (but also rumours only) that this happens if you have prolonged times where you claim a net loss by deducing expenses which leads to lower total income. Which would mean that it is less a matter of how much you work than on how credible this is for earning money/how obviously you try to deduct stuff you really use for everyday life.
The tax office will cancel your freelancer status automatically, if you did not do anything and declare 0 income 0 gain for a couple of years (not sure how many exactly - but then it doesn't matter anyways, and just saves you hassle. Restarting the freelancing is easy: just fill out the form again, and in case you're not of a catalogue profession mention that this was considered freelancing before).
Note that as a freelancing engineer with a main job, e.g. professional books could either be deduced via the freelancing or via your "Werbungskosten". My guess would also be that there isn't that much discussion about software that can solely be used for engineering. Everyday software, and your computer that has "game" in its name will more probably cause trouble.
freelance more than 19.5 hours, it is full-time and you pay social taxes
Not sure what you mean with social taxes: as a freelancer you're decidedly not an employee, and besides the volountary obligatory health insurance (freiwillige Pflichtversicherung) you're yourself responsible for your social "insurance".
But yes, 20 h/wk is one limit that decides whether it is main or side business.
Note that it is not that easy to reach the 20 h/wk within the labour laws while having a 40 h/wk full-time job. If you get outside those, your main employer can assume that your work there is negatively affected by the side-business and that looses you your right to doing a side-job.
earn more money than in your full-time job and something happens
Difficult to answer without a claim what happens.
you can earn a million working just one hour and you don't pay taxes
Definitively not legally: the very first thing in order to start freelancing is to go to the tax office and fill in the start a business form saying "freelancer". They'll then approve of you belonging to one of the free professions, send you your new tax number and tell you that from now on you'll have to hand in compulsory tax declarations. And that's where you declare the million - and pay your tax for. The form does not ask how many hours you worked, it is exclusively concerned in the gain.
your third party insurance counts for freelancing too
My private third party liability insurance doesn't. A professional third party liability insurance does (should be for the correct profession!).