There is no Gen 2 of the M4 as far as I am aware. There is a different M4 model (T Pro) with a different handguard, charge handle and larger bolt release button. But there is nothing mechanically different, just aesthetic changes.
The three notches, or stars, means it is a Modified Choke. Yes, you can shoot slugs from your modified choke. You can use pretty much any type of 12-gauge 2 3/4-3" ammo through this choke.