There's nothing unique about the Type M other than the sticker on the back.
You take an R32 GTSt, it has optional upgrades available when you buy it new from the showroom, like a sports bumper, sideskirts, bigger brakes, alloy wheels etc.
You take these optional upgrades, then bundle em into a package, and offer it to customers for slightly less than what it'd cost to get em all seperately.
Now you're gonna need a name for this package... and you can't call it "OMGWTFLOL" coz no one wants to drive an "R32 GTSt OMGWTFLOL", so you call it something sporty... you call it a "Type M"... so generations of people who consequently buy the cars run around thinking they have some special car called the "R32 GTSt Type M" when all they have is a base model with a handful of factory extras... all of which are available on the base model.
You also get to sit back and chuckle in amusement as the occasional village idiot then starts calling his "R32 GTSt Type M" a "M Spec R32 GTSt".
/end rant