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It behaves like it has air in it.
I don't know if it is possible to damage the system this way. 5 ounces seems like a ton of fluid due to compressing the piston to get new pads on. Maybe your estimate is off...
I would start with a proper bleed and see how it goes.
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David.X5
2001 X5 4.4i Sport
SOLD! at 160k miles
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