It seems correct that the exchange contacts (but not all) are the problem. I went through my contacts and selected a bunch of them and added them to favorites.
Then on the iPhone, set it to synch only favorites, and now I have my contacts back and selectable through Bluetooth. However, it only shows my favorites.
I can probably add them one at a time and test to find out which contact(s) are the problem. But that will take a lot of time.
I'm just happy I can dial from iDrive contacts again!
09 Space Gray E90 M3 DCT: BPM (Stage 1, DCT and Servotronic) tune, Gintani Sport Exhaust, Dinan Intake