Engine Damage with low oil level??

[X5Dawg]

OK, have not had any issues with the X in quite a while (knocking on a big piece of wood!). Noticed it knocking upon start-up they other morning and thought "that's what it sounds like when it is low on oil". Check it - not even registering on the dipstick. To keep it brief, I ended up adding 4.5 quarts to get it between the 2 lines on the stick!!!

Issues - (1) obviously my oil level sensor needs replacing because I never got the yellow oil can warning light. (2) pretty sure my shop shorted me on 3 quarts of oil on my last oil change - I usually burn a quart within 3K miles which is where I am at - this would explain it being so low without seeing any indication of a leak.

Question - what possible engine damage could I have with running it with only 4-5 quarts in it for 3K miles?? It seems to be running fine now and did during that timeframe.