I'm pretty sure ByteDance does license music. I don't know if they license all of it, but I'm pretty sure the RIAA or ASCAP could easily get an injunction if they didn't license any music that was theirs.
They do license the music, it's very ham-fisted though. They just pay out huge lump-sums to keep PROs happy. I've heard they're trying to build something more sophisticated like YouTube's Content ID system to get more accurate numbers on who/how much they should be paying.