I used Redline's ATF D4 in my old 323i e36 years ago. BMW spec'd LT-2 for that manual trans for the 2.5L six engine. I also noticed the shifter was MUCH smoother with Redline than with what was in it before. I assume it had the OE BMW LT-2 fluid. Car had around 100K kms when I changed over to Redline D4. I kept that car a for four years and it had 245K kms on it when I sold it. The trans shifted smoothly when I sold it.
I changed the trans fluid three times in the 140K kms I owned it. The car always was parked outside in the cold German winters, and I never had trouble shifting gears cold.
I have been using Redline ATF D4 in my 135i for about 40K kms now. It also shifts MUCH smoother than with BMW's MTF-LT4 fluid. Fist time I changed my manual trans fluid was with LT4. The trans seemed to shift about the same. Maybe a tad worse when cold. My 135i trans always had a notchy 2nd gear when the trans was cold.
I then switched to Redline ATF D4 in my 135i N54 manual trans. It shifts
so much better now! When the trans is cold, it is most noticeable the improvement in shifting smoothness. My 135i is parked inside a garage - not outside though. I would never go back to BMW trans oil in one of my cars.
Dackel