I can still create a virtual copy in a project with 3.1.3 build 48. What you describe (seeing only the “M” but not the copy itself) sounds very much like the issue described here: PhotoLab 3.1.0.27 Bug! Virtual copies do not update film strip by @Joanna.
How do you start PhotoLab? Directly from the Dock or by using “Open with…” on a file or from another application?