Have I landed in hell?

Did you have a CRUE (Certificado de Registo de Cidadão da União Europeia) from before you arrived in Portugal in January 2021 or do you have a passport from an EU member state?

If not, did you apply for a residency visa before you arrived in Portugal?

Posted by: @engineer

My wife and I arrived on the 05th Jan after living in Germany for 7 years, we spent Christmas in the UK with family and ferried across to France on the 3rd, where despite the residence in Germany they stamped my passport like a 3rd country national so 90 days entry.

If you showed them your residents permits from Germany they shouldn't have stamped your passports, if you didn't then we were right to stamp them.

Assuming neither of you have passports from EU member states you would still be limited to 90 days in the Schengen area outside of Germany (where you are a registered resident) because you are third country citizens. Residence rights in one EU member state issued to a third country citizen do not entitle you to residence in another EU member state.

At the moment I am still a resident of Germany and can move here as such until my German one finalises the cancellation process, delayed there because of lockdown.  As I said the person in SEF said we have until July so either they are wrong or there is something else in the background allowing this that they know of.

There was a lot of confusion on arrival in France on the 03rd and they did not understand the rules and despite arguments, they stamped the passport as it was British and seen as 3rd country despite the German residency papers.

There is an old saying, The right way, the Wrong way and the French way, ever tried arguing with a Frencjh immigration officer?  They don't care what you say.

Posted by: @engineer

At the moment I am still a resident of Germany and can move here as such until my German one finalises the cancellation process

Unfortunately you are mistaken. To quote sections from one the EU's own FAQ documents;

Will I enjoy further free movement rights within the EU after the end of the transition period?
UK nationals protected by the Withdrawal Agreement in one Member State will not be able to invoke the Withdrawal Agreement to obtain the right to move freely to another Member State, to establish themselves or to provide services or cross-border services to persons established in other Member States. This does not affect any rights UK nationals may enjoy under other instruments of EU or national law.
It is not fair that the rights of UK nationals are limited to the EU
Member State where they resided at the end of the transition period as
the Withdrawal Agreement does not include the right to intra-EU
mobility after the end of the transition period.
UK citizens will – if they comply with EU legal migration legislation applicable to third country nationals – still be able to move to other Member States, on a temporary or permanent basis. For example, UK nationals issued with a residence document under the Withdrawal Agreement by a Member State applying the Schengen acquis in full will be allowed to move freely within
the Schengen Area for a period up to 90 days in any 180 days period. Today, the Schengen Area encompasses most EU Member States, except for Bulgaria, Croatia, Cyprus, Ireland, Romania and the United Kingdom (Bulgaria and Romania are currently in the process of joining the Schengen Area). Of non-EU States, Iceland, Norway, Switzerland and Liechtenstein have joined the Schengen Area.

You need to follow the procedure on this link to get Portuguese residency.
https://imigrante.sef.pt/en/solicitar/residir/art116/