Recent experiments observed micrometer (µm)-sized Selenium (Se)-doped Germanium (Ge) particles forms a network of active Ge inclusions amidst an amorphous Se-containing inactive phase during initial lithiation/delithiation cycles. Such an inactive coating phase is supposed to be responsible for the superior performance of cycling stability and capacity over un-doped Ge particles of similar size, however, the understanding of fundamental mechanism still remain elusive. A reaction-diffusion phase-field model, coupling the large elastoplastic deformation, is therefore originally developed investigate the role of the inactive phase in morphology and stress variation of Se-doped Ge electrode upon lithiation. The incorporation of both the Butler-Volmer electrochemical reaction kinetics and Li diffusion, for the first time, enables to directly determine the conditions at which the lithiation process exhibits the diffusion and/or reaction controlled behavior. We find that the hoop stress at the surface of Ge particles is significantly suppressed by the protection of the inactive coating phase, especially when characterized by the soft nature and the high Li diffusivity. The present study reveals the physical underpinnings of previously unexplained favorable electrochemical reaction, diffusion and fracture behavior of active/inactive-phase anodes, and thus offers valuable insights and guidance toward high-performance anodes for lithium-ion batteries.