Funnily enough, saying a music label "dropped" an artist means the opposite.
As far as the usages of "dropped" in music industry terminology goes, I think it's pretty clear which meaning is intended. But outside of that, when the direct object is not a person, it's often ambiguous enough that it would be better to either use a different word or at least change the phrasing to add additional clues to the meaning.
Very weird. I thought they were abandoning it.
It's common lingo in a lot of communities (E.g. sneakers, fashion, music, gaming, etc), especially ones that skew younger.