Yes, they do automatically end up in the Exclude list, but can be removed. Even the separate partition from the drive that Time Machine backs up to can be removed from the list, although that is pointless.
The next question is, would you really want your iTunes library, which is already on an external, backing up to another external? Does it change often enough to include it in Time Machine? I manually back up mine to another drive, and don't slow down Time Machine by making it index all those files.