Terms of Use for Playing Musical Instruments

[WhiteArchmage]

This is, indeed, only SE covering themselves legally. They really don't care if you decide to play Bohemian Rhapsody with your buddies in your private house or in front of a bunch of randos in Gridania; but if you post it up on YouTube or stream it on Twitch and the copyright holders decide to complain, it gives SE an out by asking you to take it down (in the worst case, ban you, but that likely would only happen if you, say, make an entire youtube channel consisting of Perform covers of Top 40 songs) instead of the copyright holders holding SE liable.

Basically, it's a wink and a nudge of "Yeah, just tell your mom I totally didn't let you have a sip of my beer" than an actual legal threat.

EDIT: OH! Also, it's because technically speaking it's SE's property, much like how every screenshot will automatically have SE's copyright on it. We don't own our characters, or our houses, or anything, SE just rents them out for us. So, legally speaking, footage of someone using Perform would also hold SE liable as it is their platform being used "ilegally"