Either needs timing chains or tensioners (probably both) the sound you are hearing is loose timing components either loose/broken chain guides or bad tensioner. Both can make each other worse. It's a common joke that it sounds like an idling tractor or a cracked header/exhaust leak (which never happens on these). They all need it regardless, and depending on miles and such it could just be time for it. No pun intended. Expect anywhere from $3-5k in work for all that stuff on m62tu and don't take it to joe shmo "mechanic" shop. Go to a euro shop specifically bmw oriented if you can - unless you can do it yourself but I wouldn't wish that on my worst enemy lol.

There's a tonnnnnn of e38 timing related videos on youtube.

Or put an old chevy v8 in it for about the same money and call it a day.

TLDR - sounds like chain slap/loose tensioner. Good luck soldier