Absolutely replace that sensor. They can crack/fail internally and it results in 'slop' in position detection. THis can cause VANOS position errors. (There are 5 sensors that form the main 'engine timing dataset'... Crank sensor, and two cam senosrs for each side. All the DME knows is those 5 streams coming in, and from them it has to determine engine timing, misfires, camshaft errors, vanos errors.
I dont like 3rd world aftermarket sensors. I like OE or OEM, but hard to nail that down. I usually just buy from a BMW dealer online. Saving $30 just isnt worth it.
HOW did you clean that VANOS solenoid? I use a can of carb cleaner, BLAST It while I actuate the sensor. Click Click click. You can often times hear the sound change as crap is cleaned out- from a soft, hesitant <click>, up to a crisp CLICK.

But you need to actuate it. BE SURE you use the right voltage, some are less than 12V as I recall.
Finally, I think the DME will roll the vanos/cam to a safe default position when it isnt getting good data. Which would jib with your observation it doent seem to be adjusting.
Some BMW software tools have a "VANOS FUnction check" which commands the DME to move them to various positions. Usually useful for digging, although I think you have enough info for now.
GL. Report back!