Seems as if you run low on ram it will reset itself back to the default library (all purchases). Might be a bug that it's not saving it's last used state. On my 12.9 iPad Pro, the library setting to show only downloaded content seems to stick longer than my iPad Air 2. The Pro has more ram, twice that of the Air 2.
It's definitely inconvenient, but at least the ability to show only content on the device is there. Seems like its following the same or similar design principle as the awful music app insofar as it's ackward everything-and-the-kitchen-sink approach to streaming your entire library and playing only downloaded songs. It makes more sense to have a preference setting for downloaded content only (both the music app and the tv app), but then again I cannot understand to this day why Apple has EQ settings buried in the preferences for music and not make them available in the music app itself. Kind of like needing a screwdriver to open the case of your hifi amplifier to get at the tone controls buried inside.
