Yes, everyone, it's M'aiq the Liar, that NPC who is considered by many to be an Easter Egg of sorts. I assume everyone here is a roleplayer, but even if you aren't, how does M'aiq fit into your game? Is he an awkward moment that cannot be explained? Do you ignore him? Do you address him?
I've fallen into the habit of seeing him as a sort of sage, or wise-person. Usually my characters find him somewhere randomly, walk up to him, and wait for him to say something "wise". It might be "Nord wishes he have glorious mane like Khajiit" or "M'aiq does not remember his past; perhaps he never had one" or "M'aiq is very practical, he has no use for Mysticism."
And in some cases (like with Gunter, Son of Talos, who is an oaf, and not very bright) my character will not even know what M'aiq is talking about, but they look at him with awe, anyways. It doesn't matter if they're dull or bright, though, they always look forward to whatever M'aiq has to say next.