On my E39 & E53 the opposite happens - the passenger side mirror goes down in reverse when driver's mirror selected but not when passenger mirror selected. This is presumably to assist in reverse parking etc.
Sounds like you've got some wires crossed if it is doing the opposite. Possibly your gear lever is slightly out of adjustment and is telling your mirrors the wrong information about which gear you are in ?
BTW, is this your E34 (I have never had this function on either of my E34s) or your 7 series (E38?) ?