/!\ DISCLAIMER /!\ The wording is deemed to be incorrect, as anybody doesn't have "rights" for using copyrighted material for media even if it isn't monetised. Instead, most Scratch projects got away with this thanks to exemptions that this is a children site. This section of the TOS also may have always been this way, I can't really check for sure. Hence the questioning title. Problems rather occur if the exemptions become invalid, in which case heaps of past projects will be canned and creators will not be able to pick the right materials for their content. Original: We have to stand up against the new TOS (Terms of Service). Not only are they planning to substantially implement AI, but they are also removing our rights on Scratch to use copyrighted music?! The main reason why teens such as me use Scratch is for the freedom of using otherwise unusable music, sound effects, etc. As Scratch was a programming site for kids, they allowed Scratchers to use copyrighted assets in their non-monetised projects. This new TOS clearly changes everything that was great in Scratch. If this all goes ahead, it probably will shy me away from this platform. As much as I enjoyed the nearly 8 years on a great educational site, the last few months have made me realise the horrible direction Scratch is heading.
Source: https://mitscratch.freshdesk.com/en/support/solutions/articles/4000219182-scratch-terms-of-service