Is it the badge itself or just the stripes that are fading? If it's just the stripes you can (and I would recommend this) get replacement vinyl stripes that go on top of the existing ones. Once in place you'd never spot the difference, and these ones are more fade resistant.
I did this on my old M3 and was very satisfied with the outcome. Best part is you can get them for <$10. Of course if the badge itself is worn (like my engine cover badge is) then this won't help you.
And I would definitely say refresh them if they're faded, not sure this is a car that fits the patina/worn look.
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E46 M3 Coupe 6MT Jet Black/Cinnamon GONE
E85 Z4M Roadster Imola Red/Black GONE
E90 M3 Sedan 6MT Jerez Black/Fox Red GONE
E86 Z4M Coupe Interlagos Blue/Black
E92 M3 Coupe 6MT Interlagos Blue/Fox Red - Build Thread
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