driving in rain wet condition 528i bmw will water get into my kn cold air intake that is installed in the fenderwell

yes but not enough to do anything severe to your vehicle

avoid driving in flooded areas.

Remove the K&N if you like your car and don't want to be replacing the MAF and reducing engine life.
BMW requires the air filter remove particles over 7 microns. The K&N filters at 27 microns when new. It also allows oil to contaminate the MAF which can destroy the wire as it attemps to self clean. If this happens the car will run with reduced power as the engine will go into default mode. Most drivers won't even notice but the power output will be reduced by up to 25% and economy will also suffer.
Another problem with the K&N is that it allows water to pass right through. It will take dirt and crud with it.
A paper filter, much like a paper towel, will absorb the moisure/water and trap it in the filter media. NO contaminants will get through and the water will only make it through as a vapour.
The CAI is actually reducing your HP. It sounds nice and feels nice but objective tests have shown time and time again that the BMW air box design is far superior to back yard CAI designs. On the dyno all but one actually REDUCED power output!
Only an $800 carbon fibre CAI designed for the E46 M3 actually showed a power increase. 2 to 5 HP. For $800.
Everything else is actually detrimental to your engine, your power output, and fuel economy.
Below are two objective tests on oiled filters.