And the iOS TV app is horrible for accessing my shared library on my iPad. I have to quit/restart the TV app for it to even find the shared library. And it's a joke trying to find the movie I want from slowly updated alphabetical list of 600 titles in my library.
May I suggest Plex? Trust me, it's much much better and if you have a 24/7 server on, the way to go.
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From that answer I can see that you never tried to add any media like movies or audiobooks from other sources than Apple's stores to your iTunes media library.
Guess what happens when you do that. They all get mixed together in one big pile, which is in this case is the music list. So what iTunes does here is essentially running back confusedly to momma.
Manually added media get only sorted into the corresponding categories after you manually edit the metadata, even when the type of media should be clear from the file format.
Movies never got added to the music list - only audiobooks did this - and yes they should have read the file extension as an audiobook, however many ripped audiobooks are mp3s so that wouldn't always be reliable anyway and a proper ripped audiobook with the file extension would have had it's metadata correctly set anyway - you can't really blame itunes for incorrectly made metadata.