The removable panel is supposed to hide a mount for a tow hook. They're quite common on European cars; this is a vestige of the stillborn European sales program for the LS (along with the 5-speed manual tranny and the available Euro shocks).
In case it's not obvious, a tow hook is a hook (or eye bolt, in the case of BMW) for a tow truck to hook when it's loading the car onto a truck, pulling it out of a ditch, or doing something similar, to keep the tow cable from damaging the bodywork.