Active items 'M rerolls into is fixed per seed. This means the same active item on the same seed while holding 'M will always reroll into the same other active item every time.
One-time use items: The item disappears before it can be rerolled.
Sacrificial Altar: If Isaac has no eligible familiars, the altar can be rerolled without being consumed.
Book of Virtues: If an active item is combined with the Book, only the active item is rerolled; the Book remains unchanged. If no active item is combined with the Book, the Book will be rerolled on use. ‘M also cannot give Book of Virtues, as it is considered a passive item.
Breath of Life: Breath of Life is rerolled once the charge is fully expended. After one second, Isaac starts getting hurt as if he was still using Breath of Life until he leaves the room.
Broken Glass Cannon: The item is rerolled instead of turning into Glass Cannon. This item can also be given by ‘M directly.
Butter!: The active item is rerolled before being dropped.
Car Battery: The current active item is used twice before it is rerolled.
Esau Jr.: Isaac will transform into Esau Jr. if ‘M rerolls Isaac’s active item into Esau Jr. However, he will not transform into Esau Jr. if the item itself is used.
As the original character will be holding ‘M, Esau Jr. must be used twice for it to be rerolled.
Friendly Ball / Moving Box: As the item must be used twice to have its intended effect, rerolling it on the first use will prevent it from being used to its full effect.
Glowing Hour Glass: Glowing Hour Glass rewinds time before the reroll goes through, preventing it from happening.
If Glowing Hour Glass rerolls into a rechargable item(e.g. Spin to Win, The Boomerang), The Glass will have all its charges restored, allowing for infinite rewinding.
Magic Skin: Items given by Magic Skin cannot be Magic Skin even if it’s rerolled on use. However, as Isaac will not be holding Magic Skin after using it, it will be able to replace future items after being rerolled.
Notched Axe: The item cannot be rerolled by either using it or depleting its charge.
Once ‘M gives a good active item, it can be dropped so that it can be continually used without it getting rerolled.
For this reason, it is recommended to drop 'M when taking unknown pills, in case Gulp! appears, which would prevent Isaac from keeping any active item.
Some active items have effects that can be harmful to Isaac when used; consider if rerolling your active item is worth the risk of getting an item that you can’t reroll (either at all or without hurting your run).
Alabaster Box is especially noteworthy, as it cannot be rerolled, and will also prevent Isaac from gaining soul hearts until he uses or gets rid of it.
Like Missing No., the name 'M is a reference to a glitch from the Generation I Pokémon games, often thought of as a counterpart to MissingNo. itself. This is also referenced by its appearance, as random jumbles of pixels is very similar to the corrupted sprites you would see from a sprite error in Generation I Pokémon games.
The description is a combination of Broken Remote and The D6's description, "It's broken" and "Reroll your destiny".