They are not headlights, at least in the US.
In countries where halogens are standard and Xenons are an option, the inner "lights" are the high beams (what you are no doubt expecting).
In the early iterations of Xenons, the bulbs took a while to warm up to operating temps, and their lifespan was shortened dramatically by using them as "flash-to-pass" high beams. So the inner lights were halogen high beams, and used solely for the flash to pass role. The current bi-xenons don't have this issue, so they are used for low, high and flash-to-pass.
IIRC, the pre-LCI E70 used the inner lights for DRL's. The angel eye halos now serve that purpose. And the inner lights were also the cornering lights, but that function is now served by the fogs. (It's been 2 years since we said good-bye to our 2008, so my memory may be faulty on those two roles).
The bottom line: The inner lights on your 2012 are much like male nipples. An interesting indicator of the evolutionary past, but pretty darn useless today.
2014 535i MSport Space / Black, ZCW, ZDA, ZLP, ZLS, ZPP, H-K and 704
2015 X1 28i xDrive Alpine / Black, xLine, ZCW and Ultimate
2015 X1 35i xDrive Black / Black, ZCW, Ultimate and Xenons
2014 328i SportWagon
2011 535ix MSport
2011 X5 35D
2008 ///M3 Vert
2008 X5 3.0
2007 X5 3.0
2006 X5 3.0
2006 550iA SP
2003 540iA M-Technic