In the present work, millisecond-range flash lamp annealing is used to recrystallize Mn-implanted Ge. Through systematic investigations of structural and magnetic properties, we find that the flash lamp annealing produces a phase mixture consisting of spinodally decomposed Mn-rich ferromagnetic clusters within a paramagnetic-like matrix with randomly distributed Mn atoms. Increasing the annealing energy density from 46, via 50, to 56 J/cm2 causes the segregation of Mn atoms into clusters, as proven by transmission electron microscopy analysis and quantitatively confirmed by magnetization measurements. According to X-ray absorption spectroscopy, the dilute Mn ions within Ge are in d5 electronic configuration. This Mn-doped Ge shows paramagnetism, as evidenced by the unsaturated magnetic-field-dependent X-ray magnetic circular dichroism signal. Our study reveals how spinodal decomposition occurs and influences the formation of ferromagnetic Mn-rich Ge-Mn nanoclusters.