I had the same on/off airbag light happening on mine until the light stayed on all the time.
I blamed it on the seat ocupancy sensor and I even tried the bypass trick and I couldn't fix the light. When I tried to clear the error with inpa or gt1 I get an internal error which cannot be cleared and translate to a faulty module. I got a 'new' air bag module which I am going to replace but because it's under the central console I will have to find time to do it.
So, if you have inpa check the status of the ocupancy sensors and also the errors the airbag module reports and go from there. If you cannot clear the errors the it might be then an internal module error.

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4.8is 2004 imola red
4.8is 2005 Black on Black - DINAN/2 sold
4.4 2004 X5
2003 330xi
2008 328xi - sold
4.4 2000 X5 - sold