If I recall correctly, they specifically have ToS before you can even use the Performance feature and it clearly states that you can't perform third party music which is pretty much any song that is NOT in this game. Having said that, it's pretty much SE's way of covering their butt from lawsuits as plenty of people play third party music anyway (at their own risk of course). In my honest opinion, I think they should scrap the Bard performance entirely since I think it's really redundant (we already have the ost and orchestration scrolls) and uh stupid to just be restricted to music from this game only.