Well, They were exonerated by the effects of the first laws against the jewish population, that prohibited access to public functions (politic, magistrates, etc.)to the jewish population, and they were generally appreciated for their service. Then, with the 1935 Nuremberg laws and Massive propaganda campaigns, they just become "subhumans" as the rest of the jewish population in the eyes of the average german. And of course at the Wannsee conference every possible exemption for ww1 veteran was simply ignored.

At first, mainly because of the Reichspräsident, Paul von Hindenburg, a former army general and WW1 hero, certain jews were not included in the "Gesetz zur Wiederherstellung des Berufsbeamtentums" ( Law for the Restoration of the Professional Civil Service). This law basically banned jews from working in civil service. Because of Paul von Hindenburg, there were exceptions though:

- World War 1 Veterans who served on Front

- jews that continously been in civil service since the start of WW1

- jews that lost a son or father in combat in WW1.

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After von Hindeburg died in 1934, those categories were ignored