There was a craze in the mid 1970s for drilling holes in bike components to reduce weight. Chainrings, brake levers, and rear derailleurs were drilled full of holes, even seat posts and handlebars by a few people which was pretty stupid. Some bikes had so many holes in them they didn’t have a shadow.
The craze died out when components started failing and drilling out aluminum alloy parts saved only a small amount of weight anyway. The cut-out bottom bracket shell was a hang over from this and lasted through to the early 1980s. It did save a little weight as the BB shell is a pretty hefty chunk of steel.
Doing this by hand was pretty laborious and Masi like most production framebuilders had a die made that would stamp out the “M” in seconds, using a fly-press.