Alright, sorry not to bump this thread but it seem I get a hang on it by a little bit.
So it looks like it support both normal maps and specular maps[?] as seen here --
Have to give shout-outs to Masamaru for his indispensable tool that without it and detailed documentations of the format I'd probably lost by now.
Was thinking that their normal maps looked literally half-transparent, however it seem just a regular RGB one -- guess that's a good start then, hahah.
Another question though -- do we have to enable the NM flag via the relevant model/mesh or it's all defined via PEG_DESC? -- let's say there's this one texture that doesn't have NM, then I added one with necessary changes to the PEG_DESC as well -- will it be working instantly in-game?
Edit: Oh, and to answer my own question --
...does it do anything to the game?
It does, hahah. Can see clearly on how they work with the muscle, and beard as well. Granted nothing that significant for stuffs like area and vehicles.