MIC-E or (Mic-Encoder) DATA FORMAT
The mic-encoder (as developed by TAPR) is a device that sends a 1/3second APRS data burst at the end of a voice transmission. It is like the "roger beep" when you release the PTT button. Mic-E was originally intended to encode your postition when you used the PTT on your hand mike, but the APRS world has changed quite a bit since then.
Mic-E is a method of encoding an APRS position report that was designed to make the packets very short so they could be reliably sent at the beginning or end of a voice transmission like MDC data in the commercial radio world. In Mic-E, the latitude along with some other data is encoded into the Destination Address field (7 bytes) of the AX.25 UI frame and the longitude along with some more data is encoded into the Information field (as short as 9 bytes) of the UI frame. This encoding uses all of the printable 7-bit ASCII characters instead of just 0-9, A-Z, and a-z. This made the packets much shorter than the "long-form" position reports using clear text that was common in APRS at the time.
The Mic-E specification includes a 3-bit message identifier that is encoded into the first three bits of the Destination Address field along with the latitude. The standard message identifiers are M0 (Off Duty) to M6 (Priority), C0 (Custom 0) to C6 (Custom 6), and Emergency. The intent was that a group might agree to the meaning of the six custom message types and use them as they saw fit.
For whatever reason, Kenwood chose to use Mic-E encoding when they developed their first APRS radio, the TH-D7 handheld. They have stuck with Mic-E in their subsequent APRS radios and Yaesu is using Mic-E in their APRS radios, too.
As indicated, not many people really pay attention to the Mic-E message types, though, obviously, someone does hence the question the OP received. If you had several people working an event and they all had APRS Mic-E encoders, then you could use Mic-E to convey quite a bit of information without spending a lot of air time to convey the same information using voice. In general practice, though, I'm not sure Mic-E messages are that important.
In Mic-E data format, the station’s position, course, speed and display symbol, together with an APRS digipeater path and Mic-E Message Code, are packed into the AX.25 Destination Address and Information fields. The Information field can also optionally contain either Mic-E telemetry data or Mic-E status. The Mic-E Status can contain the station’s Maidenhead locator and altitude.
Mic-E packets can be very short. At the minimum, with no callsigns in the Digipeater Addresses field and no optional telemetry data or Mic-E status text, a complete Mic-E packet is just 25 bytes long (excluding FCS and flags).