The primary issue is that the appeal process was rejected. This shows that either all appeals are rejected outright or the person who was physically responsible for checking it didn't read the appeal or view the video.
I'm not sure how anyone could reasonably assume "this is me personally performing a 300yo song" - either by reading the appeal notes or viewing the video could assume that it breached copyright.
This is why there needs to be damages / fines for all incorrect appeal rejections. Because if there's no penalty for getting it wrong, there is no motivation for a company to actually do anything about it.
If it costs them $1000 - $10,000 for getting it wrong, it will be more cost effective for them to pay someone $20/h to double check before rejecting an appeal.