Ticket inspectors on the Munich public transport network
When you board a bus, tram, subway or local train in the Munich area, nobody is going to check your ticket and there are no turnstiles to pass through. The exception to this is that from the late evening onwards, you will have to board busses at the front and show your ticket to the driver.
In order to keep people honest, the service uses teams of ticket inspectors who ride round in groups of three or more and check tickets.
So, if you are on a bus and somebody walks up to you, waves a badge in your face and says something incomprehensible in German, the person is almost certainly a ticket inspector so just show them your ticket and smile.
If you do not have a ticket, you will be issued with a fixed penalty. I have been told that you can pay this on the spot if you have money with you but most people pay it later. If the inspectors are happy with your ID you may be allowed to continue your journey, otherwise, you may be removed from the vehicle.
The penalty may increase for repeat offences.
I certainly would not recommend travelling without a ticket, I have found that, on a daily commute in Munich, my ticket is checked once or twice each month.