I was staying in a youth hostel on Exmoor a while ago, my early 530i auto tourer (same master cylinder) was parked outside. I got talking to a German visitor, who turned out to work for Bosch, we talked cars, he had a look under the bonnet of my car and said "Ah, that's an ABS1 system, my colleague XXX designed that". It obviously was replaced by ABS2 and I think he said that the later E34's had ABS2. So are they interchangeable? No idea but as it's brakes, I would suggest you either swop the whole system over or you leave well alone and refurb the master cylinder.