When you said "S65" I was thinking the M-B V12 with the twin turbo...but damn, those snails are huge! Can anything fit into an E30? We've certainly seen enough projects of them.
Unless they made that (V8 or V10) engine magically weigh the same as the original I4, then i'd reckon the weight balance will be quite off, and in order to balance it, they'd have to somehow shift or add weight to the back, which cannot be great for the handling.
i dunno, my gut instinct is to say DO NOT WANT. I'd admire it, but when it becomes a headache, i'd prefer it to be someone else's problem and responsibility.
The engine is sitting way too high, so the handling of this thing will need lots of work.
The bodyshell alone will need a huge amount of reinforcement (ie Not just a roll cage), and the suspension towers and other bit and pieces will all have to be heavily uprated if the car is being built to last.
I love the car and love the motor, but I'm not sure it makes much sense considering it won't be able to get any of that power to the ground. I will give them credit on shoehorning that motor in there.