The way the exhaust is configured it seems wrapping the internal pipes produces more noise by preventing exhaust gases escaping into the chamber's sound deadening materials. The e92 M3 exhaust mod leaves the material in place and wraps each bend in the pipes to produce progressively more noise. So you can have a 'one pipe' wrap for more noise but not too loud, up to a 'fourpipe' for all hell to break loose. :evil:
The only issue I would be worried about is the 35I being a turbo engine and messing about with back pressures. No idea if this might compromise performance or even damage the engine long term.