The muting is a thing it does but doesn't always catch it. Sometimes the copyright holder can submit a DMCA notice directly to the channel and you can get a strike similar to youtube. Some people have gotten vods completely deleted and had takedown notices because of playing music during a 5 minute break or something similar. It's still a much much lower risk than youtube which is why you still see people play music on twitch.Doesn't Twitch just mute the sections when it comes to music