One thing that I think nobody thinks about: there are two sides to this thing, other than Google. One is the artists, who have already spoken. The other one is the users, who probably want to be promised "all the music from X participating artists", rather than "some of the music from 10X participating artists"... I'm not 100% sure that Google standing by the second side is right, but surely it needs some consideration.
If Zoe says no, she will not be part of the deal, simple as that. I think that an offer saying "all the music from ten thousand artists" sounds better than "some of the music from a hundred thousand artists".
Corporations are not good or evil. They're amoral.
Google only appears to be acting in bad faith because they follow the (IMO dangerous) ideology that because humans don't scale everything needs to be automated. They are essentially doing the epitome of "one size fits all", especially in how they deal with customers / business partners.
Yes, it's tone deaf, but it has nothing to do with being evil. The only reason this is at all a problem is that they're successful enough that it works.