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Bad news. To be clear, iTunes replaces the local files in iTunes itself (i.e., on your Mac, not just on your iPhone/iPad) and replaces them with streams?
 
That's frustrating. What happens to your original local ALAC files in iTunes itself (on your Mac)? Do they stay or are they replaced by streams?
 
This is exactly what iTunes Match always did. If files are matched you get the iTunes store version when you stream or download from he cloud. The original files are not touched unless you delete and re-download them yourself.
 
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