Yes, the hose that comes from the thin metal line coming from underneath, should be going to the intake boot. The fuel pressure should not be dropping (Oscillating means nothing) but it's not really clear about how you are checking the pressure. It would be best to check the pressure under load (and rpm) with fuel gauge taped to the window and driving to rule some things out. At this point though, if you know there has been an update exactly for this problem and the update wasn't done, then maybe lean towards that as well.

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1988 325is (purchased new) sold
2004 X5 3.0 2005 X3 2.5
2008 X5 3.0 (new to me)