No, disconnecting the wheel sensor does not disconnect the ABS module. IIRC, your module is under the dash....the BMW experts will chime in soon I suppose. Anyway, disconnect the module itself...fairly large plug with many wires.
When my '99 528 module went bad, it affected shifting and a host of other things, to include the w/shield rain sensor. My first symptom was the transmission symbol on the dash....looks somewhat like a gear and the trans was starting off in, I believe, 3rd which made it appear to be slipping but it wasn't.
I don't think you have a trans dipstick under the hood....I think you had ahold of the PS dipstick....pink doesn't sound correct either...it should be red....if truly pink, it may be water contamination in the PS reservoir and if water, could/would cause "tight" steering.
Search previous threads by Bluebee, CN90, 540iman, and several others...they have a lot of knowledge and experience and Bluebees ABS DIY is priceless. I think many contributed to her DIY but she has it all in one thread...extremely helpful.
Note; I had to laugh at my "new" BMW dealer....I traded in a very well-used '99 528 on a 2011 X5. I was not a fan, nor even knew anything about BMW when I purchased mine a little over two years ago and paid $3k for it (actually the auctiondealer I bought it from (Freedom Auto, Manheim Pa) said to buy it, drive it for three months, and if I wasn't happy with it, return it and he would refund all of my money. I had very good luck with the 528 and it sold me on the value and comfort of a BMW. Anyway, yesterday I stopped by my dealer since I saw my old 528 on the used lot and thought I'd see what they were asking for it (was hoping something like $500 or $750 and I would have bought it back)....imagine my surprise and following belly-laugh when I discovered they're asking $5250 for it!!!!!! It's a nice 528 but not near THAT nice!!