Master system BIOS files is not included in OS release. This files should be supplied by users.
For SMS BIOS function cartridge expects following files:
/MEGA/smsbiosus.sms for US bios
/MEGA/smsbioseu.sms for EU bios
/MEGA/smsbiosjp.sms for Japan bios
Bios files can be taken from master system rom collections, like goodset or nointro. Files should be renamed as listed above.
However, master system games will work even without bios function, this function just make genesis sms compatibility mode closer to original SMS.