Issue with Google Ads PMax Campaigns Attracting Bot Traffic and Overspending

I’m currently facing a serious issue with my Performance Max (PMax) feed-only campaigns on Google Ads. Despite working with a highly experienced agency—who has a proven track record of over $100 million in revenue and 5+ ROAS with other clients—our campaigns are suffering from what appears to be bot-dominated traffic.

Symptoms:

99% of clicks appear to be from bots: Unrealistic click behavior with no engagement or conversions.
Extremely low CPCs (e.g., €0.01–€0.03) despite running high-ticket products (luxury segment in Germany).
Unrealistic impression spikes: Massive impression and click surges often occur within the first few hours after midnight.
Budget drain: Campaigns frequently overspend their daily budget limit (DSL) within a very short time, with no meaningful traffic or results to show.

Background:

I sell high-ticket products in Germany and rely on shopping ads for qualified traffic.
This issue started after my Google Merchant Center (GMC) account was suspended, due to a false flag claiming there were "no products" on the site.
We contacted Google support, who reviewed the case and confirmed there were no actual violations. Our GMC and products were reinstated.
To be safe, we switched to a new Google Ads account, which initially performed well for about five days. After that, the same pattern re-emerged—huge traffic spikes, bot-like behavior, overspending, and no real conversions.

What We’ve Tried:

Switching ad accounts
Working with a top-tier agency
Verifying all merchant/product/account setup issues were resolved
Contacting Google support (no clear answers so far)

Request for Help:

We’re at a loss here. Even with experienced help, everything seems to be technically correct, yet the campaign performance is entirely unrealistic. It behaves like a bot farm is targeting the feed-based campaigns. Is this related to: