If the reservoir is dark you should give it a flush. The two year flush interval goes by pretty quickly…
Suck out the old fluid first, fill the reservoir with new fluid and flush using your favourite method, starting with the passenger side rear brake. Avoid using the full travel of the brake pedal during the flush, since you can damage the master cylinder seals by venturing into the rarely-used region of the master cylinder’s piston travel. A power flush (pressured tank) is easier and recommended by Mercedes; bonus points if your scan tool can actuate the ABS solenoids and flush the whole block… a spirited drive on loose traction (gravel, snow, sand…) following the flush will also actuate these solenoids and get fresh fluid into the ABS block, but not as completely. IIRC a litre tin of brake fluid was around $20 last time I bought it?
All that said, it is “normal” for the pedal to sink somewhat, and difficult to get a north american style pedal feel. But with the brake booster exhausted (pump pedal a few times with engine off) you should arrive at a ROCK HARD pedal feel, then that pedal will sink an inch or two under your foot once you restart the engine, stopping some distance above the floor.
Note that sinking all the way to the floor isn’t normal, and is likely a bad master cylinder.
The recommended MB 331.0 brake fluid is available at your Mercedes dealer and has a slightly higher wet boil point than common DOT brake fluids.
The red “BRAKE” light indicates a low fluid level in the reservoir (or a wiring fault…) and an unsafe driving condition (as do all the red warning lamps). So absolutely check your fluid level, but you stated that the fluid is brown so I assume you have checked the reservoir level.
The amber ABS lamp indicates loss of some or all ABS function. Commonly this is due to a faulty wheel speed sensor, which can be caused by corrosion in the tone wheel… try tapping the sensor(s) into the hub to reset the sensor gap. A T1N-aware scan tool can pull fault codes directly from the ABS/ESP module and help direct your troubleshooting. A generic tool will only read SAE fault codes from the engine module, and these are “best match” substitutions of the more detailed Mercedes fault codes that a T1N/901 Sprinter scan mode will provide.
-dave