I have often come across floppy disks in the past that were marketed as
IBM Formatted Floppy.
What exactly is the meaning of
IBM formatted and what is the significance of it?
And if I format the floppy on my windows PC, does it still remain
Despite what some may think, in the past, much software was ported to most of the available platforms (which was a pretty big feat since there were so many back then, but without the benefit of cross-platform, portable code frameworks).
Application programs were often cross-platform, but cross-platform games were even more common. For example, SSI frequently released their games for Amiga, Apple, Atari ST/800, Commodore 64/128, IBM, and occasionally a few other niche platforms. The boxes would then be marked with the appropriate label indicating which platform the game was for. It would indicate both the format of the binaries as well as the file-system layout of the disk (e.g. FAT12 for IBM and clones, GEMDOS and several others for Atari, Disk ][ format for Apple II, OFS/FFS for Amiga, CBMFS for C64, etc.)
Figure 1 shows an example of a couple of games available for different platforms with corresponding labels.
Yes, Windows (still) uses FAT12 as the default file-system for floppy disks.