Tagging for interest. I have a harsh 2-1 downshift and upshift as described in the OP. I've had the Mechatronic sleeve seal replaced and fluid drained and refilled (not flushed). Maybe the software update will help.

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2006 X5 4.4i
Sport package, summer package, cold weather package, DSP + Nav
Bought 2/14 with 73k miles