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Makes sense, thanks for the info. It's odd they have that hole there - don't know if related but when I pulled the inner fender about cup of wet dirt fell out so owner beware. I'll see how my hack works. I used undercoat so the plastic is stuck to the metal now.

After repairing the rust spot, I noticed the corner of the fender liner can be maneuvered so it sits in front of the steel fender edge, where it will help prevent chips. Seems like it's meant to be assembled this way, but my 2018 M3 wasn't. See photo.