This coolant hose / coolant return line runs from the expansion tank / radiator to the engine of the 1989-1990 model E34 525i, which used the earlier M20 2.5 liter engine.
There is one of these hoses on every 89 and 90 model 525i, and it's a common failure point
Fits the following BMW Models:
BMW 525i 1989-1990 (E34 with M20 engine)
BMW Fitments:
5 Series
E34 (89-95) > 525i M20