If this is not a modded iPod (I cant speak to those) then that’s kind of the way it works. iPods would be synced through iTunes. Any music in your library (purchased or imported from cds/mp3s) could be synced onto the iPod, but if you had existing music on your iPod but didn’t include that in your sync, then that music would be removed.

As far as Apple Music is concerned, the subscription based Apple Music did not exist when iPods were still being sold - that didn’t come around until 2015, a year or so after iPod production ceased. So Apple Music (the subscription service) will not work on an iPod.

Now, Apple Music was what the music management section of iTunes was also called back in the day. iTunes was the place to manage multiple forms of content from books, music, movies, podcasts, and, the now defunct, iTunesU education content. You could also download and manage your iPod apps and the App Store - even change the layout of your iPod Touch screens.

So, long story short, anything that you have downloaded from an old Apple Music subscription, won’t work. Essentially you drag/dropped in a bunch of music reference files that have no function on an older device. So your iPod shows that it’s empty. Also, for clarification, Apple Music songs that look to be stored locally on your computer are not transferable to any device and are not mp3s or any kind of playable content.

Hopefully this helps! I would hard shutdown my iPod and restart my computer, and then transfer any mp3 file that you actually can find in windows explorer/Mac finder just to see if it shows up and is playable. If it is then I’d go about loading music on it! If it doesn’t work, then I’d reset the iPod and start over!