"Engineer" is a very broad term that could cover many areas, so it is hard to know what story your are talking about. Do you remember any additional details? A particular project type, like tanks, rockets, aircraft, or ships? A particular step in the chain, like designer or someone working to assemble parts? While many of these are only "engineers" in the broadest sense (or not at all), it is so vague it would be difficult to help you out.

That said, there are some areas where I have sources on Germany compartmentalizing information for secrecy, though my sources are more from fighting men than the home front. Many interrogation reports of U-boat survivors are online, especially on uboatarchive.net, but one of the more explicit descriptions is the opening of the Report on the Interrogation of Bismarck's survivors (emphasis added):

The inexperience and youth of the majority of the survivors, many of whom were under twenty, precluded much reliable information being obtained. Most of the survivors had only knowledge of their own part of the ship and prisoners emphasised that neither officers nor men received more information than was required for the performance of their own particular duties. It was evident, from interrogations, that much information had been purposely withheld from the ship's company, the very extensive sub-division of the ship into watertight compartments hindering an exchange of information which might otherwise have become common knowledge.

In reading these reports, it becomes clear how often tiny details are important to the interrogators. When captured survivors will not often divulge information they know is important and this information is often more limited, but an offhand comment was much more likely to slip through. The date of someone's marriage and honeymoon, for example, could confirm when the submarine was in port after a patrol.. Or the note of which channel the submarine left through could confirm the success of Operation Chariot. The small slip-ups sometimes gave important information, and the interrogators never knew what would or would not be important.

I have fewer details on the design side. However, it is more difficult to compartmentalize that information, as in many respects an idea of the whole is necessary to properly design specific components. To a certain extent some areas can be isolated, someone designing an engine doesn't know what it will be installed in (as there are many applications), but in many areas this is impossible, such as the suspension of a tank. Once in production, that becomes easier for certain components, but those assembling the vehicle definitely know what they're working on. However, I have no sources in this area.