LIBDIR defines the directory where sendmail+IDA expects to find configuration files, the various dbm tables, and special local definitions. In a typical binary distribution, this is compiled into the sendmail binary and does not need to be explicitly set in the sendmail.m4 file.
The above example has a leading dnl which means that this line is essentially a comment for information only.
To change the location of the support files to a different location, remove the leading dnl from the above line, set the path to the desired location, and rebuild and reinstall the sendmail.cf file.
Thu Mar 7 23:22:06 EST 1996