Not for nothing, Europe is a continent. Whether you believe Tolkien based his works on or in Europe, both are false on their face. It doesn't even make sense, so please try to better articulate what you mean. Because you literally have argued that Tolkien based the continent of Middle-Earth on the continent of Europe, then you have waffled and changed your argument from in to on. Either way is nonsense. What you must have meant was Tolkien based his stories, not the element of his story setting, Middle-Earth, but the stories themselves, on history and mythology of the various peoples of Europe.
But, in fact, other than Scandinavian epics and myths, and specifically Finnish and Norse epics and myths, that is false.
If you can support your claim, you'd be more convincing. An example of some very similar non-Scandinavian European story found in Tolkien's work would drive your point home. But I am unaware of any example of, say, Italian or Romanian or Polish or Swiss or Danish folk stories or myths being borrowed by Tolkien. And we need not be so vague. Europe was never a single culture, but always many. And Tolkien was not writing to give Europe a history and mythology; that purpose was only for England.
Inexplicably, you chose to be incredibly vague. Just because France is in Europe does not make Europe representative of France. You can say the Eiffel Tower is in the Milky Way, but this is overly broad and imprecise; it makes far more sense to say it is in France.
Similarly, Tolkien borrowed from very specific Scandinavian sources, and that is borrowed; his works are not based upon these sources nor upon ancient Scandinavian culture. To conflate Scandinavia with Europe is the same mistake as conflating France with the Milky Way.
Your claim that Tolkien based his works on Europe is incongruous because it is overly general and imprecise, and it is also a pretty good example of the vagueness fallacy.
He was a gifted linguist, influenced by Germanic, Celtic, Finnish, Slavic, and Greek language and mythology.[1]
Yes, indeed, as the wiki you've drawn from states, Tolkien, the man, was influenced by his studies of various ancient cultures. But to create his fiction he drew from his own life, his Christianity, his experiences during WWI, and Norse and Finnish mythology. Tolkien did not draw on the entirety of the catalog of European mythos to build his world. If you can show me, say, how one of his characters draws from characteristics of a specific Greek hero or god, or likewise for any Germanic, Celtic, or Slavic stories, I'd really be genuinely interested.
I have already named the specific Finnish source that Tolkien borrowed from, and provided a specific example of Tolkien borrowing from Norse sagas, namely, using characteristics of Odin for a few of his characters. Please provide any specific example of Germanic, Greek, Celtic or Slavic influence in Tolkien's work, and name the source. Just one will do, so please take your pick.
[1] https://en.wikipedia.org/wiki/J._R._R._Tolkien%27s_influence...
I can’t understand what you mean by this at all and it sounds like an absurd thing to say. Can you please explain?