E46 SMG pump systems have a fluid reservoir to hold additional fluid capacity needed for pump to pressurize fully. On all models except CSL version, this reservoir is built into the intake air-box. On CSL model reservoir is independent and mounted to shock tower.
Some important things to note on both CSL and regular models this reservoir is technically an expansion tank, it should never be filled to the top especially when SMG system is pressurized. If you overfill system pressure in SMG system will slowly bleed off over time and the fluid from system will flow back into reservoir during this time. If it is over-filled to top the reservoir will overflow and leak fluid through breather port in cap. This fluid will then drip down into engine bay. If not identified correctly the leak might look like its coming from pump section and be misdiagnosed as a pump leak of some sort.
It is also important to note on non CSL version that there is a check valve at bottom of reservoir tank. This check valve slows/stops the flow of fluid when pump feed pipe is disconnected. To allow full flow, insertion of feed pipe needs to be in proper position and pushed all way through to release check valve and allow full fluid flow. Not doing this will cause SMG pump fluid starvation and introduce air into system this problem could come into play after system has passed bleed procedure and continues to introduce air in system periodically after vehicle has left repair shop.
With CSL type reservoir there is no check valve but due to the long hose section it is prone to having air pockets, we suggest dismounting reservoir and try keep feed line as straight as possible to allow air pockets release. if you still have problem then try remove line from pump until fluid flows and reinstall.