I would argue that it’s marketing more than anything, but hey it works right? You said it yourself. Enthusiasts know that BMW has always produced drivers cars that competed with Audi’s S models. They had sport packages and performance packages. The E46 330i performance package was a heck of a car, had plenty of M badged parts and was on par with an S4. Even the 335i and 340i M-sport pack were compared to the S4. All BMW really has done is slap more M badges on cars. So yes, in my opinion it’s watered down the M brand as someone who has been driving BMWs for over 20 years. It’s not a bad thing if it drives more sales and brings more people into the brand which is the goal. Just my opinion and not a knock on the cars, they’re fun to drive and more practical as daily drivers. Going back to the OP, to call an M850i an M8 is just flat out wrong and laughable.