Self leveling suspension doesn't have anything to do with how the suspension sits when it isn't moving or when it is going straight. What self-leveling suspension is has to do with going around corners. Normally when youre going around a corner if youre taking a left turn the left springs and shocks will compress, which makes the left side shocks and springs lower than the right side. With self-leveling suspension, when you go around corners, the suspension levels out the height of all the shocks/struts which allows the car handle way better around a corner and also makes it a lot more comfortable when youre inside the car.
As for the issue, do you notice the handling being worse around corners? Or anything like that? It could just be a bad sensor that's throwing the code and everything could be working perfectly. Although, self leveling suspension is not necessary and can be gone without. It is just a nice performance feature BMW throws on their cars to make them more luxurious and comfortable and to make them more performance oriented.
2008 535i Sport Pkg
2007 Mazda RX-8 - 6 speed MT
OEM BMW Parts