Twitch VoDs can no longer contain copyrighted music

That's because Twitch has an iterative design process. They have usually released new systems as soon as they can work. This causes the initial implementation to be lacking a feature and not being as Streamlined. Twitch has worked like this since Jtv (rip ) Gaming.

Justin.tv! ahhh, never forget.

So you're saying that when Youtube's content ID grabs a video because of music copyright, it's not taken down, it's replaced with advertisement in the form of audio swap?

It depends.

What happens is Youtube tosses a Ad in at some point where the revenue goes to the publisher(who then may/may not give the artist some $ for it).

They don't do an actual audio swap.

What if I'm playing Euro Truck Simulator 2 with the digital radio playing? :3

OK. I always kinda thought they just took down the video until the audio was acceptable.