When the code is ready to be opened and I have settled for a design; right now it's very much in flux and I want to see where the vision takes me, and which challenges I encounter along the way.

I'd like to apply for funding by the end of this year, when I'll have saved enough money from contracting to dedicate myself fully to this project.

From my experience I never felt "ready enough" to apply. I also underestimated, despite knowing how slow the process would be, the time required not to submit a proposal for funding but how long it would take to receive an answer. Consequently I recommend you start "too early".

Any recommendation for funding in the EU? I know of NLnet

I think NLNet is pretty good (I helped on https://nlnet.nl/project/xrsh/ and now working on my own https://nlnet.nl/project/ImmersiveXP/ ) but otherwise I only know at the local level, e.g. subsidies in Brussels e.g. https://www.innoviris.brussels (I'm in touch with but didn't formally apply yet).

You might also want to try https://www.sovereign.tech/programs/fund which isn't limited to Germany AFAICT but does focus on infrastructure.