Auto recognition only works in certain cases, and is never failsafe on any side. But what it does do is allow the publishers and some copyright societies to monetize the track if they should choose. There are so many millions of videos out there, that a lot gets ignored and never found.   However, any copyright holder can order youtube to remove material but they have to know that they are being pirated in the first place. Youtube will remove it when a complaint is made.
There are separate copyrights involved in the performance and the songs being performed. Just cause nobody has seen it doesn't make it legal. You are still a bootlegger and acting against the copyright act, it's just that those involved don't know. But it was your intention to freely distribute modern copyright recordings which is totally immoral. There is a fine line difference between putting up a niche recording on the quiet and the creation of a specific free exchange system of copyright material. Also it does people out of artistic credit for songs, and people thinking there is no copyright in a work. As I say though a different matter for old trad. material, but even then there may be published arrangements involved.