It's mostly the extremely high levels of fraud associated with such submissions than the content in itself. In Deezer's case:

> The consumption of AI-generated music on the platform is still very low, at 1-3% of total streams, and 85% of these streams are detected as fraudulent and demonetized by the company.

If they were more commonly consumed by real revenue generating users then these companies likely wouldn't care as much. As it stands, it saves them a lot of money at very little real user downside to try to catch the fraud at both ends (the fake listeners + the fake uploads) rather than just one end.