You can create any number of Libraries. Don't place MC's Library (when you browse to create it) under the Music folder anywhere. It is a separate collection of files and folders for MC only. You might want to create a new folder, say Documents/MC Libraries and under that, create your libraries.
Libraries only contain references to the media files, and each library will reference the configured set of (imported) media files.
For most people, creating and using multiple libraries is not necessary, as you can use a single library and configure views to show content from one, the other, or both. The benefit is that you don't need to duplicate views, settings, etc. So make sure there's a very good reason for a separate library before going down that path.