BMW is not really plowing new ground here, they'er really just going at it in a different way. Utilizing exhaust heat to add additional hp to the output shaft is not new and it is really one of the first steps in the evolution of turbine engines. The aircraft engine industry has already done this. The sequence went kind of like this:
1. Add a centrifugle super charger to the engine. More horse power!
2. Use exhaust gas to drive super charger. More horse power!
3. Gee the turbine is so efficient that let's turn the super charger AND let's gear it into the crankshaft also. COMPOUND ENGINE AND MORE HP!
4. The turbine is so efficient let's just take the power from the turbine only, and get rid of the recip engine and use just a combustion chamber.
GEE WE JUST INVENTED THE GAS TURBINE!
The power generating industry takes the gas turbine one step farther, they use the turbine exhaust heat, like BMW, to make steam and turn a low pressure steam turbine that is geared into the gas turbine output to turn the generater.
The Pratt and Whitney 3300 engines on the B29 were a great example of a compound engine, if you look at each cylinder exhaust there is a small turbine that is geared into the engine crank through a step down gear and a small shaft. Pretty neat!
BMW's steam approach probably allows them to store a certain amount of heat energy during low main engine operation which would provide a more constant level of additional hp over the full range of enging operation.
Rex