If the Mercedes dealer documented that they changed the filter, but didn't, there is one reason. If the Mercedes dealer knew about the engine making metal (unlikely IMO) there is another reason. Both seem like a long shot.

A cel is not a smoking gun. It can come on for a loose gas cap.

Your assumption is that either the BMW dealer could have caught the failure before it became catastrophic (ie cheaper to fix) or that they could have identified the failure before it happened. Perhaps. Codes don't say the engine is making metal. They say something is out of range. If the BMW dealer fixed a symptom and not the root cause, use that to go after the warranty company. I suspect though that their policy expiry of benefits clause is pretty rigid.

__________________
2007 X3 3.0si, 6 MT, Premium, White

Retired:
2008 535i, 6 MT, M Sport, Premium, Space Grey
2003 X5 3.0 Steptronic, Premium, Titanium Silver
2002 325xi 5 MT, Steel Grey
2004 Z4 3.0 Premium, Sport, SMG, Maldives Blue