When the DME detects an error condition- this can be an absolute failure of a sensor or module, or it can be a combination of operating parameters that the DME determines to be outside the operating range, it sets a code in memory. It ALSO sets the CEL light. (Sometimes a code which is not an emissions failure can be set and the CEL does not come on. And after a certain number of starts with no new codes present, the CEL goes off. The code still sits in memory.)
Like I said, there are hundreds of errors and failures and issues that will cause the DME to turn on the light.
The light itself is NOT a defect. It is indicative of some other fault. The reason this matters, for a lemon claim, is that most states require the same failure to recur
If you have not noticed, in life there is a spectrum of 'honesty' that you will get from people, usually in direct relation to how 'documented' their statements may be... so an lemon law attorney- or a TV repair man, or a BMW SA during a VERBAL DISCUSSION will say very different things as opposed to what they put on a written pleading, a written estimate or a written work order.
Good news for you is after you are done with this car, you'll never have to worry about dealing with BMW again. Best of luck