It’s an educated guess on a rumours website.
If your song is encoded at 320Kbps it’s not going to stream constantly at 320kps for the full length of your run/walk or whatever. That’s inefficient.
The whole aim of modern computing, whether that’s CPU or network is to get what needs going done as fast as possible and then switch to low power.
I fully understand that. However, you're assuming linear process. If I start e.g. Album 1, your logic is that Album 1 will fully download so as to get everything done as fast as possible, and then switch to low power. And if the Watch KNEW via witchcraft that I was going to listen to that whole album right there and then, then yes - I'd agree.
However, this is the real world, where Stuff Happens. e.g. What if I start Album 1, and then two songs in I switch to a different album? Are you honestly believing that the Apple Watch is going to keep downloading album after album because it think I'm going to listen to the whole thing, - even when I continually switch album after a song or two? There's absolutely zero chance of this happening. Zero.
Guesses are not rumors, fyi.