Rev Limiter

Sounds like an ignition component fault. Not sure on the engine/ignition setup on them but id look at plugs/leads and their connections, then dizzy cap if it has one and its rotor arm. Dont just change them, check them electrically and visually - save wasting cash. A simple weak spark will show up with the engine under load as a bad misfire which would feel as you describe.

Some BMWs use a centrifugal limiter, never heard of one failing but its not impossilble, more modern ones limit by ECU - no idea where the switchover is.

All modern fuel injected cars that I know off, the rev limiter is done by the ECU, and works by cutting fueling. You don't want unburnt fuel going through the cylinders on a catalyst equipped car.

Your mate is right in that some older cars used a rotor arm with a built in centrifugal switch type set-up, which limited revs by cutting the spark (hence the backfiring/exhaust popping when the rev-limiter cut in/out)

Certainly sounds like either a fuelling or ignition issue. First things I'd be checking are the plugs and fuel filter.

IIRC my fathers BWM uses a centrifugal dizzy item to cut spark and the ECU detects no spark and stops fuelling. I could be wrong as i havent studied it closely, but im fairly sure it has the spark cutter.

And check with the petrol cap off - blocked tank vent line could cause a large tank vacuum under load.