"I haz success"!
I was able to confirm that the double lock disconnects the lock mechanism so there is no need for the blocking bar that prevents lifting the handle when the door is locked.
I cut the little tab off that has been causing so much grief.
Red is the lock bar, blue is the tiny tab that actually blocks the handle when locked.
Blue is the tab and yellow is the part of the handle that is blocked
Blue arrow pointing to the empty space where the tab used to be.
So now it's as it should have been from the beginning and how BMW decided to change them to on the current cars.
The handle pulls up but the cable pulls on a deactivated lock. It "dry fires" and does nothing.
I'm sure you could still break something but the odds of breaking a handle carrier with my modifications will be reduced 90-95%.
I left the zip tie on figuring no reason to remove.
I was going to just remove the entire lock bar but I'm not sure if it has other functions (lock the key cylinder in) so I just cut off the offending part.