A common brake upgrade to the E34 5 series was to install E38 (7 series) brakes. Only downside is you also have to install larger wheels.
My understanding is the OEM brakes have well-rounded performance. In spider chart terms, it would look like a round pizza with one slice taken off, and that would be due to dust. They still excel with high performance, solid longevity all at a reasonable cost
Fourth I would make sure you are using high quality pads and rotors. Use name brands like raybestos, centric, Bosch, etc. Lower quality brands will have more issues.
Depending on the tier of pads Autozone does source from Bosch. The big benefit to Autozone is that you only pay once as they do a lifetime warranty and it covers wear. I have their most expensive pads on my car and have replaced them twice a year for 5 years now.
I've been running Bosch pads for about 12 years now never an issue on any make or model.
Ceramic pads Bosch Quietcast BC1047 or Wagner OEX for longevity, cleaner wheels and reduced stopping distance when warmed up.
I got a nice upgraded pad and rotor kit (all 4) for around $340. If you already have a set of wrenches, you can probably just do the job yourself; so many youtube tutorials. I did a full brake job on my other car for the first time ever so bought all the tools needed (maybe $150 worth) - wrench set, torque wrench, breaker bar, wire brushes, grease, brakleen spray - and still very much under what I would have spent at a mechanic. If you have the space and time, it's really not that bad and can actually be enjoyable with some beer and tunes. Would never go to the dealer for something like that unless I had money to burn.
I've got an alltrack (same brakes as the standard gti) and I've got ate rotors from fcp with bosch quietcast pads from rock auto. I was just looking for stock replacement and they have 10k miles on them so far with no complaints.
I replaced my brake pads front and rear today with some good quality Ceramic pads. I had just done the fronts a couple months ago but I used some Bosch pads that one of the parts suppliers gave me to try. They were supposed to be their best. They were quiet and smooth but produced crazy dust!
I just replaced the pads (Bosch BE1633H) and rotors (Textar 5Q0615301G) on my MK7 R, and after torqueing everything I noticed a clunk when rolling up and down my driveway (happened only when going from forward to reverse or vice versa). I jacked the car up, took the wheels off, and checked all the bolts, everything was tight and torqued to spec. I then noticed that the brake pad itself is shifting.
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