My kids have individual apple ID’s for their Apple Music, but they are on a shared family plan for backup storage. If I change all of us to a shared family plan music, storage etc. will it affect their music libraries and settings or will they migrate over as if nothing changed?
Their music libraries should remain intact. And there will be no impact to the iCloud storage plan. Just don't cancel their individual subscriptions first. Let the Family subscription do it automatically. See the footnote in the 'First, set up Family Sharing' section of:
Get an Apple Music family subscription - Apple Support
"If someone in the family group already has an individual or student subscription to Apple Music, renewal of that subscription is automatically canceled when they join the family group."
Family plan switch
