Be aware that there are some changes to the M42 over the years. The cam chain guides, chain tensioner, cam chain cases, oil pressure relief valve and the belt-driven accessories changed over the years. You have an E36 motor, so some of those changes would already have been installed.
Later parts are always better than early ones. Some M44 parts will also swap to the M42.
If I'm making one motor from two, I'd be concerned that the same problems might be present on both motors. The M42 had a few weak spots - early type cam chain guides & tensioner. The thrust bearing is only a half-shell (180 degrees), use an M50 shell to get 360 degrees of protection. Water pumps, plastic coolant manifolds and radiators can be trouble regardless of year. Even mild overheating can be deadly to an M42...cracked heads are common. Be sure the cooling system is in tip-top shape. It must hold 2 BAR pressure.