I believe (perhaps incorrectly) that BMW had a number of reference/marker grooves on the rod to be used for possible/future milling to the proper square-bottom channel for o-ring use. As they tended to 'work things out on the fly' and/or tweak things until a problem was solved. I've got 4 shallow, curved grooves in my '82s rear brake rod - they look like the shallow ones closest to the middle of the rod in Monte's picture and are too small to fit o-rings without being properly done on a lathe. Depending in when the brake rod in any given bike was assembled, it may havae more or fewer grooves in it, or alternatively, the other grooves could be added by an owner ordealership with access to a small machine shop.
I have just 2 o-rings on mine on either end. And, for grins I tucked one under the felt washer that goes on the outside under the brake lever. I've considered getting the rod machiend for more o-rings, but (knock wood) I've been doing OK thus far..