I noticed that its grille is a bit big and slanted in the GT7 model.
And the Center Armrest is taken from the RHD model. Handbrake was placed in the Right hand side.
Yep, you’re right. But I remember GT7 having a car model issue when they added the BMW M2 F87 Competition which is the windshield wipers placed in RHD position as the car is LHD, and they patched it later on.
I believe that Polyphony will be able to fix M3 E36’s modeling issues in a future GT7 update or patch, since they model their cars in-house unlike Forza which is outsourced from Glass Egg. At least the rest of its model in GT7 is overall more accurate than Forza’s, so I wouldn’t care much about GT7’s minor modeling problem on the car.