Can I just clarify something from my previous response.
This is where a picture is worth a thousand words but here goes:-
I beveled the inside of the exhaust nut using the bench grinder. This was done by rotating the exhaust nut by 45 degrees horizontally on the vertical axis and pressing the 12 and 6 o’clock positions of the exhaust nut onto the corner of the grinding stone, applying gentle pressure and rotating the exhaust nut.
This will bevel the inside of the exhaust nut to about 45 degrees which was close enough for me. If you was a better match then rough it out using this method and then hand finish by whichever method works for you.
You must use gentle pressure and keep the exhaust nut rotating as the grinding stone is not designed to take side pressure. So if you are in any doubt don’t do it.
Eye protection should be worn as a minimum, but a full face mask is better, and a filter over the nose and mouth.
Now whilst I think the trouble and expense of getting the thread reclaimed on a BMW head is probably justified I think with an MZ barrel it would be more cost effective and easier to get a barrel from a vehicle dismantlers.