Thanks andrewwynn,
The photo you posted above should NOT be used to show your point.
That photo I took is when I pried the Coupler out.
It was halfway out so it is NOT an in-situ photo of factory setup!
I am very convinced the root cause is either:
A. O-ring shrinking with time.
B. The one-way valve (Plastic+Spring) momentarily seized,
pressure builds up and blows the O-ring outward...
Just some theories...
BTW, I think one can remove the Plastic+Spring combo (I did not) w/o any issues. This is an over-engineered part.
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1998 E39 528i 5sp MT
2006 E53 X5 3.0 6sp MT
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