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The wiring inside the lights has likely disintegrated. You can’t get access to fully replace or reinsulate it through the little access panels, but maybe you could stop some of the shorts and maybe that would be enough.
You can polish the plastic light covers with kits from various companies. They improve the clarity but it won’t be perfect and won’t be permanent.
I recently bought a new Hella lamp for one side of a 2008 E61 535xi. It was about $800. The other side had been replaced around 2013 when my wife got in a fender bender so it was still good. Unfortunately I was unable to trigger the angle eyes on the new light. Had a mechanic friend try to help and he could not find a wiring fault though he said there must be one somewhere. We ran a jumper from the other side. Not a perfect solution but with these 16 year old complex cars, we are sometimes just buying time. Mine is not really mine anymore — I gave it to a friend in need a few years ago but still maintain it.
I would say the most economical solution is to DIY and open the lights and replace the wiring and lenses. Have not done that but DiY a lot and the most important thing is patience and care plus researching the job. There are utube videos, some stupid, some painful to watch, and some useful, for just about everything these days. I much prefer the old days of written articles and photos, but those days are almost entirely over.
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