It is really quite simple.
Nothing gets moved.
Instead the content gets removed from the device.
Then, when you want to listen to the content on the device, you download it via iCloud to the device and listen to it.
iCloud is not alternate storage for the device.
Content cannot be played from iCloud.
- Does iTunes Match stream or download songs?
- On a computer, any songs stored in iCloud will stream over the air when played, though you can download them at any time by clicking the iCloud download button. iOS devices will start playing tracks from iCloud as they download and will store them so that you can listen to them later even if you don’t have a network connection. Apple TV only streams songs.