Hi @ramijarrah,
Thank you for outlining your situation in some detail.
The residence status 22. S. 2 is issued for humanitarian reasons. It gives you the right to work (both employed and self-employed) and access to all German social welfare benefits (e.g. Jobcenter).
Government employees should be informed about your entitlements and procedures around this type of permit. For example, there is a long document of administrative guidelines called the Allgemeine Verwaltungsvorschriften for the immigration law.
You current permit will be extended as long as the original conditions for receiving it have not changed.
You will presumably have been issued with the obligation to live in a certain part of Germany (in accordance with paragraph 12a of the immigration law). This can be changed to allow you to live somewhere else under certain conditions (e.g. taking up an employment, studies or training).
Regarding issuing you with a passport:
If it is unreasonable to expect you to contact your home authorities in order to obtain a passport, the Ausländerbehörde should issue you with a special passport for foreigners (Reisepass für Ausländer). In your case, it should be immediately clear that you are entitled to this.
Regarding citizenship:
A person needs to have a certain type of residence permit to become a German citizen. In brief, these are either permanent residence (Niederlassungserlaubnis) or certain working or refugee permits. The permit 22.2 does not enable you to directly become a citizen.
You would either first have to get a Niederlassungserlaubnis or a refugee status before applying for citizenship. Each option has various conditions which you would need to weigh up.
Here is more information (via online translation):
https://***-integrationsbeauftragte-de.translate.goog/ib-de/ich-moechte-mehr-wissen-ueber/einbuergerung/wann-haben-sie-einen-anspruch-auf-eine-einbuergerung--1865120?_x_tr_sl=de&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=wapp
I am not a lawyer; however, as you have been given conflicting advice from two different lawyers it is important to find out exactly their reasons for recommending you apply for asylum or definitely do not apply for asylum. If it you are paying for their services, it is reasonable to expect this.
In my opinion, both options (applying for asylum or staying on the permit you have) are possible for you due to your personal circumstances. The main difference in applying for and receiving asylum would be that, if you are then given refugee status, you be automatically issued with a passport for refugees and could directly from that status apply for citizenship.
Here is more information (again via online translation) about residency permits according to paragraph 22:
https://***-nds--fluerat-org.translate.goog/leitfaden/24-status-bei-aufnahme-aus-dem-ausland/aufenthaltsrechtliche-situation/?_x_tr_sl=de&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=wapp
Kind regards,
Éanna