Track days are not racing.
I'd get that double checked.
I would check BMW's (or the finance provider's) definition or racing. It may include track days.
BMW UK have already confirmed (in three previous cases that we know of) that they do not consider track days to be racing.
Don't the x35i engines have a habit of blowing up on track?
Mine's been on track twice and hasn't blown up so far. I've also met a guy with an M235i who's tracked it quite a few times and his hasn't blown up either. There's a guy on one of the other forums who regularly tracks his M135i and his hasn't blown up. They don't have a "habit" of blowing up, but we know of at least three of them that have as a result of oil starvation (I expect during long, fast corners).