Here are some takeaways from my experience. Theoretically, Apple Music (see special note about iCloud Music Library below) should do no harm to your existing library. All your current library titles should be sequestered in a folder in your finder called Music, which is a subfolder of iTunes Media. Any Apple Music tracks get saved in a separate subfolder under iTunes Media called Apple Music. I have not had the kind of sequestration issue that @Cbales is experiencing regarding access and playback.
Apple Music did not cause any problems with the sound files in my library. The tricky issue was activating iCloud Music Library, which syncs your library with the cloud. I did have some minor issues with that, but at the end of the day my library “owned” music files remained intact.
I did make a back up of my entire library before activating Apple Music, but I have not had to go back to it.
The biggest problem I deal with with was having my album artwork changed (as others have mentioned) and having to fix some metadata. I did not have massive metadata changes to deal with, but some. I did experience some of the substitution problems that @ACautionaryTale mentioned, but the main result of that was a change in the album artwork, not a change in the music itself. For the most part, I’ve had smooth sailing.
I’m also deep into this because this Christmas season, I decided to clean up all the metadata and reorganize my music library. (Not because of any problems with Apple Music, but because my musical garden needed much tending.) So, I’ve had a good look at what is in my library that I own vs. what I’ve added from Apple Music. I have not found a single piece of music that I owned outright that was damaged, lost, or coopted by Apple Music.
Your milage may vary, but I’ve had a reasonably easy experience as I transitioned over and I’ve been on Apple Music since December 2016.
As far as using Apple Music tracks outside of Apple Music, my experience is you mostly can’t but sometimes can. For example, I’ve tried to use clips of Apple Music tracks in iMovies. Sometimes a track is available, but often it’s not. Not sure about access to Apple Music tracks in other apps/tools.