I see in the pic above that the amp setting is on optical, for anyone reading this NEVER PUT IT ON OPTICAL on an E46. It should be set to NONE or COMMON, whichever setting gives you the correct volume range. As for the issue you had, it sounds like android froze for whatever reason, when it froze it was in the state where it was inserting some audio (like a nav voice command) so the rest of the units volume was reduced. A hard reset (turning it off) fixed it which is why its fine now. Android freezing happens sometimes but should not be commonplace so if it keeps happening reinstall the android ROM.
Also make sure you set the android apps to NOT auto update, updates going on in the background when you turn the car off can corrupt the OS so its important the that unit not be doing things without your knowledge. If you have any further android issues get involved with the android thread, lots of guys on there who know a lot more about android that I do.....