LorgSkyegon

Question: In the bar scene where the German officer has 2 guns pointed at his testicles, why does he insist on not letting the British go? The semi-answer he gives that they are outnumbered is irrelevant because they still would have no choice but to kill him. Practically speaking, it's suicide.

Answer: It is suicide, just like running into battle when there are hundreds of guns pointed at you. He has just caught a British spy, who potentially could be doing terrible things to his country. Sacrificing himself to save Germany isn't a bad trade for him.

LorgSkyegon

Answer: He knows they are going to kill him anyway. The "basterds" have that reputation, and he knows who he's dealing with. So, he can either betray his honour and tell them the information and die anyway, or retain his honour to not betray his own people or nation/military and die with what would be perceived as dignity for him.

Quantom X

You're referencing a different scene when the Basterds are questioning the German officer after ambushing his squad. The question is about the scene in the bar between Hicox and Hellström and the ensuing gunfight.