Please explain why this would be illegal?
The playing of music on hold is not illegal.
The problem arises when the music being played is copyrighted, and the rights are owned by others, without the proper licensing.
Licensed music is available for this purpose, and of course you would always record your own music, either an original composition, or a classical or traditional piece for which there is no copyright.
This discussion has made no mention of the actual content, so we don't know what is being played, or what the potential copyright issues might be.
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