It sounds vaguely like the S Line for Audi. I could see this swing one of two ways- dilution of the M brand, where "exclusive engine variants" translates to slightly tuned N55 variants, with no real performance gains, but large focus on the design, i.e. M Sport packages which place a high emphasis on style without substance. Perhaps stiffer springs and sways, or active suspensions with emphasis on sport and larger wheels, but not much else.
Or, BMW could do something truly special here and offer something similar to the M Sport F30 offered in Europe, with four pot calipers and larger discs, additional trans/oil coolers, and other incidental style changes not otherwise available in the states such as two tone Sport seats with Alcantra inserts, etc. and an engine lineup that embodies the classic high revability of traditional M engines. Essentially, they could make vehicles that sincere enthusiasts want, cars that embody exclusivity, rarity, and uniqueness (and perhaps even quirkiness) that is not normally available in the normal BMW lineup.
Realistically, however, it will likely be an amalgamation of the two.