it seems to me it link "only" songs that you played and unlocked, so that you don't loose your unlocked items,
and the same is true for songs moved in other directory, renamed or with tags altered (significantly i suppose)
after playing the game for a few hours, i made some reordering (moving and renamin) and retagging of most of my music (because they were a mess and the game is quite tagging reliant).
many songs changed dirs, names and tags and many were kept in their old form by the game...
it should be possible to permanently delete from the game interface the ones we don't need, the ones that only provide common basic weapons, and save the few who provide the ultra rare double cannon fury level 5 or similar
also it should be possible to associate a played song with a changed name/tag/directory with the new one (manually) there should not be any confusion if the game analyze the song and compare to the one cached...