The R53 and other BMW models have something similar. I haven't found a clear answer other than it may be an infrared sensor related to a diagnostics dealer-only system.
It's an ambient light sensor. In bright light, it brightens your panel lighting (like the petals on the gas gauge, and the clock/temp readout on the tach). In low light, it dims those displays. Very easy to test - put your hand over it while driving along in daylight, you'll see what I mean.
