Are there only like 2 people who have owned a turbo car before here?
I assume we are all talking about this noise:
A Dump valve is nothing to do with turbo "flutter"/"chatter"/compressor surge/owl noises which I will refer to as the pigeon noise from now on, it actually reduces the noise as air is venting elsewhere in the system. That said, some BOV's replicate the pigeon noise, this is usually your best route on a diesel (see below)
The noise comes from the pressurised air that has travelled through the turbo but has nowhere to go when the throttle plate is closed, so it comes back out the front of the turbo, through the blades which makes the noise.
All turbo cars with a throttle plate make the noise, but most cars have a suppressor fitted somewhere near the air filter so you dont hear the noise, in the case of the N54 the closed inlets do the job pretty well too. As someone else has said, a turbo without a wastegate will just keep producing boost until it blows up so unsurprisingly it doesnt happen.
Diesel cars often dont have throttle plates to close the system so its a lot more difficult to get the noise, I believe very high boost can do it though.
Size of engine is irrelevant, level of boost, hard intake pipes and type of air filter make a lot more difference.
It used to be said that it damages a turbo but Ive never seen hard evidence of this, as it happens the other route to the noise through atmospheric BOV's is worse as they can cause fuelling issues.