Agree with Grayybeard. If it is a caliper issue, it might not release as nicely as you describe. Not too sure about the brakeline, but my instinct says not an issue. In order to rule out the ABS, disable it. I've never done it on the e34, but have on a couple of others vehicles for this purpose. Should be as simple as removing connectors at the unit under the hood, or removing the sensors from the hubs. Do both sides of course.

Check for brake fluid leaking in the area. If it has managed to impregnate the pad, it will grab hard and cause the symptoms you describe. Swap the pads around and see if the problem follows. You should be able to troubleshoot this one.

Good luck, let us know what happens.

Dave M