For the original leon cupra's in the UK, my understanding is that the leon cupra was basically a leon sport, but with all the optional extras in place and badged up my UK dealers as a cupra.. It did NOT have the nice bumpers etc and looked much like a stock leon with 16" alloys.
It did have leather interior, auto dimming mirrors, ESP, dipping revers mirror, CD changer etc...
However seat was struggling, it was not making money, and it didn't have its 'own place' within the VAG group... creating a cupra by adding all the options just encroached into the Audi market (the dash being from an audi probably didnt
help) and so things had to change.
So seat was potentially going to become the sports brand within the VAG group = (Audi prestige, VW reliable, Skoda Value, and Seat sporty..)
So they dropped leather seats and the optional extras for the CUPRA and instead fitted 17" alloys, the bumpers and skirts (basically from the cupra 4) and voila you had the facelift cupra MK1 which most people associate as the CUPRA brand. Seats offered a sporty car with VAG quality but at a more competitive price, it brought new people into the VAG group market and was/is popular with a younger buyers.
and here we are 20 years or so later.