It certainly sounds like the evaporator froze up. The system may be low on charge, the cabin filters may be dirty, or some sort of sensor may be bad. There should be a cutout of some sort to shut the compressor off if the evaporator gets too cold.

I'm not much help diagnosing further, my knowledge of these cars stops with the W126/124. I vaguely recall someone in the diesel forum a year or two ago posting about a W211 having an updated firmware or sensor to deal with high humidity levels and preventing frosting of the coil. I'd imagine that the 211 and 212 share some commonality there.

There may be a way to enter some sort of diagnostic mode and see the temperature displays from the various sensors. If so, check the evaporator temperature and see if it's a reasonable value.

__________________
Current stable:
1995 E320 149K (Nancy)
1983 500SL 120K (SLoL)

Black Sheep:
1985 524TD 167K (TotalDumpster™)

Gone but not forgotten:
1986 300SDL (RIP)
1991 350SD
1991 560SEL
1990 560SEL
1986 500SEL Euro (Rusted to nothing at 47K!)