Quote:
Originally Posted by Rockit
Thanks "Q"
I will replace it but.... if I just disconnect it I wonder if the alarm will work but just not for the hood.
If I disconnect it should I touch the wires together or leave them apart?
Thank you all for the feedback.....you saved me TONS of time 
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Just disconnect it first to see if it solves the issue. There's no need to "touch" wires together etc...just make sure that the wiring harness doesn't fall into a place that makes it difficult to reconnect if you decide to replace it. But on the e53, I think the wiring harness is in a pretty safe location back near the firewall...it's the e38's hood sensor's harness that can fall down into the engine bay since it's located along the front ridge of the near the radiator expansion tank.
(e38 7 series hood switch...at front of engine bay)

And no, disconnecting the sensor won't affect the ability to arm the vehicle. DWA will continue to monitor the other sensors around the car. IF a sensor is faulting and still connected, then it can affect the anti-theft alarm siren system (and possibly the remote FZV) central locking (if it's a shared monitor). But if a faulting sensor is disconnected...it is no longer communicating with the system, thus the system ignores it and continues to function.
This same type of issue happens on the e38/e39/e46 sedans with the fuel filler door flap. If the actuator is faulting and is connected...it can stop the car from locking remotely...but if you disconnect it (and make sure the fuse in the trunk isn't blown...you can get the system back up and running...as long as the bad actuator is dissconnected.