phugoid, the design of the radiator is different from japanese cars where they have a separate expansion tank that refills the tanks through the top near where the radiator cap is. On bimmers the expansion tank and the radiator itself is connected so what is happening is that when you turn the bleed screw air is allowed to flow into the radiator itself and the water level in the radiator drops and balances with that in the expansion tank, hence the tanks seems to 'increase' in level.
I am also not sure what the 'official' method of filling the radiator is but this has worked for me. Top up the expansion tank to the recommended level. Not advised to fill unto the kau kau maximum as the water needs some space to expand. After reaching that level, close the expansion tank and open up the bleed screw. Fill water into the bleed screw until all the air is removed. (if you want to ensure all the air is out, squeeze the lower and upper radiator hose to release any trapped air and top up the water again.) Close bleed screw. The next time you need to fill water, only fill it in the expansion tank and leave the bleed screw shut.
Hope this helps.