This is how this part of Schedule 1 now looks.

Music incidental to certain other activities.

7       The provision of entertainment consisting of the playing of music is not to be regarded as the provision of regulated entertainment for the purposes of this Act to the extent that it is incidental to some other activity which is not 25 itself—

             (a)             a description of entertainment falling within paragraph 2, or

             (b)             the provision of entertainment facilities.

The original wording was only to the playing of recorded music. So all is clear now, isn't it?