Normally it is not added on unqualified names. However, if you use a shared message store but do not use the same user name space everywhere, you may need the host name on local names. Normally they get the local hostname. Although this may be right for ordinary users, it can break local aliases. Since that alias likely does not exist, replies will fail.
M are masqueraded.
This is useful if you have several domains with disjoint namespaces hosted on the same machine. Using this features instructs sendmail to masquerade the envelope sender and recipient as well as those in the headers. This is similar to the userdb functionality. Note that the address being looked up must be fully qualified. The argument is the name of that hub.