Hello Unni
APIPA or Link Local addresses for IPv4 should never be used as the IP addresses of BGP peers. This goes contrary to the address usage rules dictated in RFC 3927. However, some vendors and systems do use them. One such situation is with Amazon’s AWS service, an example of which can be found here. This has been known to be used over an IPsec tunnel setup to Amazon VPC. I am not familiar with other uses of APIPA addresses for such purposes.
I hope this has been helpful!
Laz