Steps performed to resolve the issue:

• Reset the modifier keys in System Settings to default (there were multiple because my keyboard can connect in 3 different ways)
• tried to run the "Change Keyboard Type" wizard a few times without success
• run sudo rm /Library/Preferences/com.apple.keyboardtype.plist in terminal AND REBOOT
• Install Karabiner-Elements (because it was still not working)
• Launched the tool and went to "Virtual Keyboard" to set everything to ISO. THEN REBOOT
• Fiddled around with the settings because of CMD + OPTION keys. (this tool creates a seperate keyboard that also shows up in system settings > modifier keys)
• I did not like the tool so i unintalled it again (there is an uninstaller option inside the app) AND REBOOT

So now here comes the interesting part:

After uninstalling Karabiner-Elements AND rebooting the mac one more time, they keyboard setup wizard showed up again. I Continued to setup as usual and this time it actually worked!!! It got correctly recognised as ISO. After that i was able to change the modifier keys in system settings and everything is perfect now. I then connected the keyboard via the other 2 options (there is usb, bluetooth and lightspeed), and each time the wizard appeared and recognised it correctly.

So that's it. I am not sure what exactly solved the issue, because before i installed karabine-elements I resetted and rebooted quite a few times. I hope this will be helpful to anybody else. Enjoy