Yes, Pentosin is used on some BMW's for self-leveling suspension systems, you're right about that... but we're talking about power steering on an E46.
Your suggestion about checking the cap is valid. If the cap says to use a power steering fluid, then the Pentosin 11s would be acceptable, but if the cap indicates using an ATF fluid, then the only Pentosin product that meets that requirement is the Pentosin ATF 1.
When you read the Pentosin specs, you'll see that Pentosin 11s is used in a variety of hyraulic applications... even power steering systems. Just not BMW E46 power steering applications.
The bottom line is that the person spent $1,200 for some work to be done. The fluid used might be questionable. The cost of flushing and replacing the questionable fluid with the correct fluid would probably cost less than $50.
If the mechanic used a fluid that does not meet BMW specs, he or she should be expected to perform the flush at their cost.