Of course M is alive, and he is the 3rd sibling mentioned in passing in Vow. He is Sherlock's fraternal twin, given over to an institution within 2 years of birth due to psychotic behavior. Mycroft judged all children as idiots from his childhood experience with M and the "stupid" Sherlock, who wanted to grow up to be a pirate. M came out of nowhere because he liberated himself from the asylum as soon as he was capable.