Comment by toast0

Most of that era consoles would load level data from the CD, and then play the music as cd-da audio. There was no DRM on the music, perhaps because nobody thought of it, but more likely because there wasn't quite enough computing power to do it. PS2 games could be on CD or DVD and could have had cd quality music as a data file reasonably, but PS1 probably not, and cross platform games likely would use cd audio because it's easy.

The choice for licensors was to have the music in the game and available on the cd or not.

For a modern release, DRM music tracks that only play in the game is an option.

We've also learned that the licenses are (or were) often time limited... The publisher can't make new copies after some time, without getting a new license for the audio. Sometimes that's also related to a different format.