This is what I think is going on
If you tap on a song in an album, it will download it, but not in the traditional sense. It downloads it and a few songs forward in the album. But it is downloading it to a streaming cache. This is so there is no lag in going from the playing of one song to another
as was the case in iOS 5.1.1. I dont know how big the streaming cache will get before some automatic clean-up process is done by iOS 6 if even any clean up is done. Maybe you have to manually delete the songs from the cache. Maybe the cache cleans itself out as you need more space by deleting the most unused songs. Maybe it clears out after a preset amount of time. Who knows.
These songs in the streaming cache do look and act like downloaded music, because they are. For example, if you turn on Airplane Mode the songs will continue to play because they ARE on your phone in that cache. Also, if you turn off Show all songs you WILL see those songs that are in the Streaming Cache
just like you would if you had really downloaded them by tapping on the Cloud icon with the downward arrow for the album. One hint that you have not truly downloaded the song when you just tap on it is that the Cloud icon does NOT go away. It remains. Thats because by tapping on the song, you have streamed it AND placed it in the Streaming Cache. It has NOT been downloaded and stored in your Music storage area. At least, that is what I have been able to gather from reading and experimenting with my phone.
The big issue here, IMO, is that this Streaming Cache is taking up memory on your phone. For those of us who subscribe to iTunes Match to control how much of our phones memory our music takes, it remains unknown how big this cache is allowed to get before it is cleared out
again, if it is cleared out at all. I have NO idea and Apple sure has not made an attempt to explain this (or if they have, the explanation is really hidden well!).
This really feels like a big step backward for iTunes Match. It has become so complicated I might as well get my PhD in quantum electrodynamics instead.
Other streaming services do this. They just hide the streaming cache whereas Apple puts it out there in the open. That's not necessarily bad. But, Apple has done it in a way that makes it confusing because music truly downloaded from the Cloud behaves so much like the music downloaded to the streaming cache.
At least that's what I think is going on.
What ever happened to, It just works.