If you do, you may damage water pump seal or the water pump may leak coolant. The E36 they claim to fit E36 m3 is not good. Also do not change thermostat arrow to the sky, keep the arrow as BMW installed it.
The aftermarket spring is too tight, without holes and causes coolant circulation pressure problems. If you replace thermostat, buy new BMW original from BMW dealer and keep the arrow left and down at 8 clock, as BMW installed. Failure to do so may lead to water pump damage that is about $110 USD for S52 engine.

Bentley manual states occasional droppings of coolant from water pump are acceptable due to shaft lubrication, premature leaking may occur, the water pump is still good. BMW water pumps do not drop any coolant, if they fail, the leak is steady and water pump is no longer good and needs replacement.

If you have blown head gasket, warped head or cracked block, steel seal may stop the smoke and can repair the head or head gasket, but repair may not be permanent. If you replace coolant, the problem may return, and you may need to buy steel seal again. It doesn't form a steel, but substance similar to stone. It may jam radiator and damage water pump as well while sealing, you need to be careful when sealing.
It seals while you drive. If you replace water pump or thermostat after steel seal installation, the problem may come back, but after some time while you drive, the steel seal may seal it again, it seals while you drive. You need to keep the steel seal in your system.
If you decide to repair head, make sure you deal with professional or BMW dealer. It's always good to keep factory assembly specs without any disassembly or if you do, make sure you deal with professionals who will give you warranty.