Hmmm... I'm actually not sure how music is treated.
I use a Google Music app (I've experienced the same issue with all Google Music apps, so I think it's something fairly universal) that has only really long tracks (an hour or more each). If I queue up a song and let it play for a bit then put the iPad to sleep with the switch or smart case, a short while later the track stops and the next one in the playlist starts up. If I keep the iPad awake this doesn't seem to occur. I would think if sleep mode affected music that it would just stop it altogether, rather than starting on with the next track in the playlist.
Can't really figure it out, but not many other people seem to notice or care, perhaps I'm the only one who listens to mixes.