From my experience, it's a good way to get your name out there.
Marketing-wise, by getting his music into shorts and other indie stuff, he basically gets people to market it for him. They are going to be marketing their works like crazy. And that means his songs will benefit from that as well (in addition to his own promotions). As it gets heard and more people discover him, other people will seek him out. Those are the paying guys. I mean, you could think of it as free marketing for LiterarySquirrel.
When I had no consulting experience I used to do free work for people. Rather than establishing my skills as worthless other people started paying me and offering me equity in their companies. Other times I would help out friends. It got me into a lot of doors and places that a lot of people ahead of me never got into.
Still, like I said, you DO have to BE CAREFUL. There are some people who will try to take advantage of it. Once I realized someone is like that, I would distance myself. Other people will give back as much as you give them. Those people you want to keep as friends. They're good people.
Even now I still do stuff every now and then. For my good friends I do a lot. But for others I'll do stuff here and there. For instance, I'd discovered Reddit a few months ago. Loved it. Decided to try and give back to the community by sharing some stuff I learned about entrepreneurship and networking. Some people really liked the networking stuff I wrote (I basically passed on the stuff my powerful/ successful and multimillionaire friends taught me a decade ago) and asked if I could write a book. I couldn't (due to health and inexperience). So instead I bought a camcorder to record myself teaching how to do what I was taught. I'm giving it to my Reddit friends for free. A lot of them have been offering to help me in any way they can as well. Some very cool people.
But, you know what? Every person has to make that decision for themselves. There's no wrong decision. It's just what you're comfortable with. I was comfortable with it. Plain and simple. Others aren't. They shouldn't do it. It won't work for them.
I only do it because I established limits. And it took me a while to learn how to do that.
All in all, in my humble opinion, I think what LiterarySquirrel is doing is smart.