The v macro contains the current version of the sendmail program, taken from the Version variable that is initialized in version.c of the sendmail source. $v is used in defining the SmtpGreetingMessage ($e) option (SmtpGreetingMessage):

O SmtpGreetingMessage=$j Sendmail $v/$Z; $b

in Received: header lines (Received:):

$.by $j ($v/$Z)$?r with $r$. id $i$?{tls_version}

and in the Helpfile message (HelpFile):

214-2.0.0 This is sendmail version 8.12.7

The value given to $v can vary with the vendor. There is currently no standard for identifying variations on the sendmail program. Clearly, $v cannot contain a true picture, unless your binary is built from the open source distribution.

$v is internally defined when sendmail starts up. It can be redefined in the configuration file or as part of the command line.