Picked th car up today.
It was apparently the steering rack controller (electronics) which was intermittently failing to wake up so had obviously developed some fault. This is attached to, and an integral part, of the steering rack which was therefore all changed.
The mechanic said the rack will be returned to the supplier for analysis.
He also said this has been seen before and is a known potential fault (although I have no idea how common).
For the original issue, were you having intermittent issues, where the "Steering assist reduced" would show up but power steering was still working?
My fresh out of warranty 2020 M3 RWD is having a similar issue where the error shows up but the power steering is fine half of the time (I do feel a "click" when first trying to turn the wheel, and then the error shows up). The other half of the time, I have
no power steering or regen + lots of errors (Traction control disabled, Vehicle hold feature unavailable, Stability Control disabled, Steer assist disabled), which makes the car impossible to pull out of a parking spot.
Luckily I haven't had power steering fail on me through part of a drive, only at the beginning of a drive.
The service center is telling me that the x190 and x191 connectors (the main and redundant power supply connectors) were powered and grounded, which indicates that the steering rack has an internal failure. They want me to replace the entire steering rack for 4.4k (including 1.5k labor), but I asked them to check for corrosion on the connectors + steering rack grounding (part G098 I think).
Any suggestions for what else I could ask for?