I would add my own MP3 file and after dragging it to iTunes, the file was matched against the apple music catalogue, instead of just itunes match as before. The original file was there, but if I had a second computer with a second iTunes session logged in, and tried to download the new song, it would download a DRM apple music file, despite the fact of me owning the file in the first place. In an scenario like mine where you use itunes match to free up local storage space, apple music meant that apple was actually "STEALING" our own music, applying DRM to files that did not have to have DRM whatsoever.
This is how it's supposed to work. It matches your songs to Apple Music, and uses the results of that match to serve to all other devices. It doesn't touch the file on your original device, but it uses the matched (DRM if Apple Music, non-DRM if iTunes Match) version on all other devices, if the file is missing.
Note that this only happens for songs that can be matched to something by iTunes Match or Apple Music; a song your recorded yourself, or similar, is uploaded (after being converted to at most 256kbps AAC) to the cloud, and downloaded DRM-free on other devices. Both with iTunes Match and Apple Music.
The main difference between Apple Music and iTunes Match is that the former doesn't match using a song "fingerprint", and that the latter serves back non-DRM versions.
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This is exactly why Apple needs to unbundle Apple Music from iTunes on Mac/PC and from the Music app on iOS. Apple Music needs to be made into its own separate app. Leave my iTunes library alone.
It does leave it alone, unless due to a bug. No thanks! Why would I go to a separate app to play a song that I happened to save to my library vs. one I just wanted to search for on Apple Music? It's an integrated experience: playing music.
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Apple Music doesn't do any matching to your library or scanning of your library. You just gain streaming access to songs that are a part of the service (around 30 million), and can also choose to download songs for offline play (as long as you're still a subscriber). Any songs you downloaded during a subscription will no longer be available without one. That's it.
This is incorrect. Apple Music does the following:
1. Music it can't match to anything is uploaded to the cloud (after being converted to 256kbps AAC if needed), and served back as-is on your devices.
2. Music that can be matched (by song title, artist etc.
not by looking at the actual music data) is "added to your library" which doesn't mean much except it'll be in "My music". It's not touched on the original device but served back as the matched version (with DRM) on all other devices.
iTunes Match does that same for point 1 but does the following instead of point 2 above:
2b. Music that can be matched (by looking at the actual music data, this time), is added to your library and will be served back to you as the matched version (without DRM) on all other devices.