Firstly, Plex takes artist name and album title from the folder name and secondly it uses these data to fetch another data from databases - by default.
Perhaps, it is a good idea, to have ability to choose in the settings, how Plex grabs data:
a) folder name - b) database
OR
a) ID3 embeded tags - b) database
Sometimes ID3 tags can be more accurate for fetching data from databases. Now, if I choose “use embeded tags” in the Settings other information are not grabbed from the databases as well as some Plex features may not work (as Plex indicates on the support page).
I have everything set to use/prefer local metadata (genres, artwork, etc) The scanner and agent are both set to Plex Music. It looks to me that Plex grabs any missing metadata (such as music styles, album reviews, artist bios, similar artists, etc) So far, I haven’t seen any music features that do not work properly, but then again, I don’t know how they would work if I just used the external databases.
I had it set up to prefer local metadata, and it’s still tagging damn near everything as “Various artists”
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There’s already a feature request for this: https://forums.plex.tv/t/id3-tag-support-for-robust-music-library-organization/
And yes I agree, it’s 2020, we should be well past using pathnames/filenames as metadata.
“Various Artists” compilations support in Plex is…somewhat problematic. For example, track artists aren’t indexed, which leads to issues like compilation tracks not being listed under the Artist, and popular compilation tracks getting ignored in Radio channels. Also, since Year and Genre(s) are album-level fields, a (compilation) album in Plex can’t contain tracks from different years or genres.