Yes, I've had similar experiences over the years with various cars (each had 4 wheel disc brakes), and not my 560.
What i think you will find is your car has either a sticking pad or caliper. That is the cause of both the smell and the brake pedal going to the floor intermittently as you describe.
Take the car for a drive (not extended) and get out on the highway for a few miles. When you stop the car in the parking lot/rest area, hop out and walk around the car - feeling with the back of your hand the relative temperature of each wheel. They all may have warmth coming off them, but the hottest one is the culprit. If you can smell the brake, all the better, as it makes for a quicker diagnosis.
The reason the pedal goes away & returns later is that the brake fluid is getting hot enough to boil due to the fact that the pads are pressing on a disc, generating heat... even though your foot isn't on the brake pedal.
Replace the offending unit & the pad set, ck the discs for heat distortion, replace if necessary, flush out the old brake fluid.
You're correct that the parking brake, if not releasing all the way, will make that smell due to the high heat generated. There was a thread on that just a month or two back.
I guess it is possible the dragging parking brake shoes could generate enough heat to boil the fluid, but in my experience, the conditions you describe have usually been caused by the dragging pads themselves: generating heat > both the disc & pad. This overheated pad has direct contact with the caliper body & caliper piston > which in turn has direct contact with the brake fluid.
Had this been coming on for a while? Has this situation come to light only after long drives at highway speed?
I highly doubt that the parking brake is causing your issue...
Even if you drove for an extended period w/ the parking brake on I do not believe it would generate enough heat to boil the reservoir over.
I'm going to wager your brake booster or master cylinders are having issues (leaning towards booster). Either way, I would take your car to a competent MB indie and have your whole system gone through. Brakes are Far to important to take short cuts on.
As my biology teacher would say "This guy is good!!!"  Only reason I knew was because I specifically remember a w140 coming into the shop, and among other things, the brake pedal went all the way down to the floor. In that car, if I recall correctly it was around $900 , but in our cars, it is much, much cheaper!!
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