Yeah it seems like strange choice from Paderborn, though we don't really know how good or convincing Effenberg is as a coach - maybe he's a genuinely decent option.
And the more I think about it the more sense it makes, because quite frankly Paderborn most like will neither go up or down, their squad is too good to get relegated, but they are already too far behind to expect a promotion challenge, this season they have little to lose and Effenberg will at the very least give them a lot of profile.
Clubs finally seem to have learned that being a good player and being a good coach are two very different things, so I wouldn't be surprised if Effenberg just didn't have any better offers.