Hmm, when it has finished step 2 it clearly states it has only matched 6k songs...Looks like it uses waveform analysis only.
And wait until it's done uploading before jumping to conclusions, in many cases it says it's uploading a huge number of songs but many of those are matched songs where it's only uploading metadata and album artwork.
Butt i'll keep it running for the night, tomorrow I'll see it if has finished.