Guys, you got it all wrong - NWA747SNN doesn't need to show a passport at all because he is flying onwards to Budapest, which is non-Schengen. At MUC, you will have to go through security, but not through passport control. You will show your passport at immigration in Budapest.
1 hour should be no problem at all. Your onwards connection to BUD will be from a bus gate. Don't remember where they are (haven't flown from a non-Schengen bus gate at MUC for a while), but I guess kind of in the middle of the terminal.
SmilingBoy.