I discovered what it is.
Read carefully:
mp3 support - 11/30/2001 by Yrgol
I added Tim “Timbo” Angus’ mp3 to wav converter into bfp. It can be found at http://tremulous.sourceforge.net/junk/cg_mp3decoder/
This will allow us to include more music in the download, since each music file will have a smaller filesize.
This will not allow you to play your own mp3’s. It is not an mp3 player, it is an in-game utility to convert mp3’s into a q3-playable format.
Reference: Official Bid For Power Website - Developer Journals - Yrgol's Developer Journal
What that does is using a .mp3 file inside music/ and converting into .menu extension (it could be .wav too). It creates a folder and the resulting converted file.
This converter feature works on Quake3e and Quake 3 1.32 - 1.32c vanilla version, but not on ioquake3 (idk why).