I'm with BMW of North America, LLC. I've checked with our experts regarding this issue. This is an industry wide problem caused by humid conditions. Moisture that condenses on the evaporator can provide an environment favorable to microorganisms drawn in either from the outside air, or from inside the passenger compartment (particularly from food or pets). This can cause a musty odor, when the air conditioner is first switched ON.
Using a specially designed tool, your BMW center can chemically clean the evaporator and evaporator box with disinfectant. However, while this can solve the odor problem for an extended period, it is not a permanent fix because the microorganisms can grow again due to the humidity in the air.
BMW recommends that you leave the A/C ON continuously (snowflake button on your A/C panel) to help prevent this situation from happening repeatedly.
Our engineers are still testing further options, but nothing new is anticipated for the immediate future. If you have additional questions or would like our assistance, you can reach us at 800-831-1117.