Yeah, I'd expect ABS would keep working at the very least. I've got a few Mk60 and Mk20 DSC brains from both E46 M3s and non-M E46s and it would be interesting to see what the differences in the firmware are. So far, I know that both non-M Mk60 and Mk20 DSC work with MSS54. Using a Z4M DSC might not be a bad idea.
I'd believe it. They don't fit neatly into emissions laws, so those blanket requirements like restriction by model year are the easy way out.