In my E36, there is a wiring harness that comes into the trunk on the left side. I believe this is tru for E46s also. If so, check if the wires are intact, or if they are worn/frayed, and maybe even broken or shorting out with something else. For a short while, I had no electronic control of my trunk release mechanism. Furthermore, I was unable to lock the doors by turning the key while inserted in the trunk's keyhole. I repaired the connections in the aforementioned wiring harness and everything went back to working beautifully.
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