We are talking about entirely different things.

You are right, the output of a model that generates music directly is, for now, easy to categorize as AI.

What this big flux of AI generated music online isn't really that. It'a a tiny bit autogenerated stuff and a whole lot of automatically remixed stuff. The reason it can not be easily classified as AI is because quite a bit of human produced music is also that, and you'd just shut out real users.