Do they also sterilize satellites?
Actually, yes. And build them in 'clean rooms'.

Has it ever happened that an instrument was deteriorated by bacteria?

No, because we sterilize the things and build them in clean
rooms. On the other hand, see Russian experience with Mir...

What happened inside that space station?
Yet this isn't an example of a satellite being damaged by bacteria.

But not one of ours and we generally don't refer to things like that
as 'satellites'. They're 'space stations'.

What malfunction happened inside the Mir space station that was caused
by bacteria? With all those people aboard the ISS, is it a constant
hassle to keep the place sterilized?

I suppose the Gemini capsules weren't used long enough for bacteria to
become a problem.

Were there any events when an unmanned satellite was damaged by
bacteria?