Some users experiencing this problem assumed that their accounts had been hacked, which is something totally logical to presume when you see that you have playlists in your library created by other people. However, the more likely cause of the problem is probably some kind of bug inside Apple’s iCloud server. Some users experiencing the problem managed to fix the issue by unsyncing and re-syncing their Apple Music app with their iCloud.
Also, it appears that the issue is only present in the Apple Music app for iPhone. The app for macOS doesn’t appear to be plagued by the unknown playlist problem, or at least, no reports suggest that the issue is present there.
At the moment, there is no official word from Apple about the unknown playlist problem. We must note that Apple released iOS 16.3.1 on February 13, 2023, and the update had a fix for iCloud. So, it is possible that the bug might have occurred as a result of the applied iCloud fix. We hope that Apple will soon resolve the issue. Meanwhile, don’t panic if you see someone else’s playlist in your music library.