Live streaming has been a great way to avoid getting tagged for copyright infringement vs a pre-recorded upload which can automatically be scanned for violations, so it is easy to see why this was a problem for Facebook. They basically brute forced a solution to avoid legal responsibility.
Via SoundClouds guidelines: "The best way to avoid copyright infringement is to ensure that you don't use anything created by someone else. Simple as that.". It has just been hard to find an equitable balance between original music creators and mix creators. "Fair Use" is such a gray area here and is barely defensible.