Valve tapping sound if engine is cold, runs smooth when hot

Without being there with you it is difficult to speculate what the noise is that you are hearing. If after the car is warmed up and the noise is greatly reduced, I might speculate the noise as being something internal. My experience with the M-20 inline six motor in your car is that they are very robust and long lived if you maintain them correctly. As far as the performance matter, internal combustion engines are, from an engineering standpoint, heat pumps. The hotter they are, the more power produced, to a point. I feel your concern and since I sit in cyberspace, I am limited as to the advice I can give. Is the noise coming from the top end of the motor or do you feel it is deeper in the engine? It is not unusual for higher mileage motors to rattle a bit and if this is an internal engine noise, you have two choices,
1. Drive it and maybe use a higher viscosity oil(20w-50 is recommended)
2. Replace the worn components. If it were mine, I would drive the car and not worry about the noise.
Repost if you have further questions Dr. Hagerty

If the technician that performed the valve adjustment has integrity and is good at working on BMW cars, return to them and state your concerns. If not then I would advise you that the valve adjustment was not performed correctly and that adjusting valves on an M-20 motor takes a fair amount of experience and is best not trusted to a non-BMW specific technician. Other issues that can affect power are throttle plate adjustment and it's state of cleanliness, the correct spark plugs(not platinum!)Properly gapped, fuel grade, fuel injector condition (are they spraying correctly), deposits that accumulate over time.