So, here goes. It's long, but hopefully helpful. Hopefully others will join in and share their experience on how this is working (or not working) similar to how we ultimately figured out how iTunes Match worked (or didn't work) when it finally worked (and didn't work). LOL
Right now I'm seeing that my playcounts are being updated just as with iTunes Match, where in it happens instantaneously when I listen to songs through iTunes from a desktop or laptop. My iOS devices are updated with the last played and updated playcount and my smart playlists are updated accordingly.
From iOS devices, it takes playing a song to completion after at least 12 hours has passes since the last sync. At that point it will sync all playcounts since the last sync. So, plays don't sync to the cloud immediately, but they sync eventually. Once that sync happens, all other devices will show the updated library.
I am seeing this hold true for songs played through the "Connect" and "For You" sections on the iOS device. I played a suggested playlist and the songs in the playlist that are also in my library show up in my recently played smart playlist on the device. Eventually, when the next cloud sync happens, I believe those playcounts will be synced to the cloud library and will be reflected on all other devices.
However, I'm not seeing this hold true for songs played through the "Connect" and "For You" sections in iTunes on my laptop. I played the same suggested playlist on my laptop and the songs in the playlist that are also in my library do not show up in my recently played smart playlist on iTunes (and are of course subsequently not pushing instantaneously to my iOS devices). Since my local library isn't show those songs as played, I don't believe they will ever show up in the cloud library or to other devices, but time will tell.
I'm not seeing ANY playcounts being logged for any songs listened to that haven't been added to my library from any device. This is a bummer. I was hoping the service would keep track of ratings and playcounts for any song, whether I've added it to my library or not. That way, I could rate songs and have a smart playlist that will pull any song i've ever rated and I don't have to clutter my library for just that one song. It would also keep from making a "favorite" song a 2 step process to get in a playlist. Right now, you have to add a song to your library and rate it or add it to a playlist. You can't even rate or add a song to a playlist in iTunes without adding it to your library first (which explains why you can do it in the Music app on an iOS device but nothing actually happens). On most other services, such as Google Play All Access, you can just "like" (star, thumbs up, whatever) and it will show up in the starred/thumbs up list whether you've made it a part of your library or not. It makes it easy to keep track of songs you liked and go back and listen to them later without the clunkiness of multiple taps. If Apple were to make APple Music work in this way, you could ultimately like a song from the lockscreen and it would show up in a playlist (either a smart playlist you create, or an auto-playlist Apple would create, like is done on Google Play All Access and Spotify).