You are correct. Only BMW builds the M5. You can mod a non-M all you want, and it's still not an M. And it won't be recognized as one by BMW, a court of law, the highway patrol, the DMV, a future purchaser of your car, the insurance agency. etc.....The VIN number is the ultimate legal identification of the true identity of the car, and you are not allowed to change it (maybe the legal folks were thinking of possers when they mandated this?).
You are also 100% correct, if I may so boldly state.
But......who here ever claimed that a visually accurate or tasteful "reproduction" is, in any way, original? This seems to be an ongoing sticking point.
Reproductions are available in crafts, paintings, furniture, cars, books, home fixtures, clothing etc. Properly-represented reproductions & copies are accepted at face value by most collectors, without protest or objection. How many personal collections, public libraries & museums contain copies, prints, models or other "poser assets", as you might classify them? Is it only cars that are a problem?
Why should individuals be discouraged or inhibited from developing reproductions while aftermarket companies openly exploit such opportunities? I applaud the fellow that builds a nice repro car at 1/3 the price.....correct VIN or not. Maybe he's a Ford enthusiast, turning a rusty $3K Mustang basket case ready for the crusher into a pretty repro GT350. Maybe a BMW owner blows $5K for bolt-ons to transform a $15K 540i to look like a $40K M5. These personal creations are treated better, in most cases. Maybe a 1999 M5 owner wants the later angel eyes or 16x9 NAV...let's object to that too, since it's model year misrepresentation? In these examples, owners are obtaining the Shelby or M5 look they desire with some sweat equity instead of repeated trade-in's with help from a fat checkbook. I give plenty creedance to the fellow who upgrades/mods using his own hands & skill.