The faulty KS is strange...usually a bad KS will do a few things: Set a code, trigger a CEL AND... pull timing to protect the engine. You lose 5-10% gas mileage.. All this based on general experience, not X5 or BMW. So this is opposite what you are seeing...
From what I've read and heard, the 'programming' they do is pretty damn bulletproof- there arent corrupted stuff floating about. Once the car completes the load and everything is verified, your car basically has THE program they intended....now BMW can write/release bad code- or code that doesnt contemplate the physical conditions of the sensors and components (which was what happened for months on end with the 2010s and resulted in the string of recalls).
For me, the most likely piece of bad info is what the SA is telling you...wait for them to put it in writing and talk to the tech before you drive off, if you want the real story....
Keep it as simple as possible...but no simpler.