It also doesn't apply to tracks you've purchased from the iTunes Music Store. I just tested it to confirm. You can re-download these, and they still come through as normal, non-DRMed M4A files.
It only applies to tracks you've previously uploaded to iTunes Match, which were matched (and so therefore come from the Apple Music streaming library). It does not apply to "unmatched tracks" (where it uploaded your copy), and it doesn't apply even with iTunes Match if you continue to pay for the $25/year match service separately.
I can't use that, and never have, because my Library is larger than 25k tracks, and then it just tells you "no".