No the muffler plays no part in that. If you unbolted the exhaust right at the heads (manifolds and all) you might burn a valve as a result ... as long as you got the manifolds and a couple feet of pipe after that, you're fine.
That said, on a e38? Ruins the car for me. It's supposed to be a cruiser luxo-barge (and it's one of the best there ever was), not a Honda Civic driven by a 16 year old pimply-faced kid.
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