All sounds in Arcade, Co-Producer, and Output Creator are royalty-free. You can use them in released music, commercial projects, sync placements, and monetized videos, no clearance needed, no extra fees.
Important: The one thing you can't do is resell Output sounds as a loop pack, sample pack, or any standalone audio product.
You own what you make
Whatever you create using Output sounds is yours. You hold the copyright to your finished music. Output doesn't claim any ownership over your compositions or recordings.
From the Output Terms of Use:
Subject to the License Restrictions, you shall own the intellectual property and copyright of any User Generated Content, for example a music/audio production, you create using the Services.
YouTube Content ID claims
Content ID claims and copyright strikes are two different things. A Content ID claim flags your video for matching audio in YouTube's database. It doesn't remove your video and usually just routes ad revenue. A copyright strike is a formal legal complaint that can affect your channel standing.
Content ID claims
If you're using only Output sounds in your track, select "I created all the music myself" when submitting for distribution or YouTube Content ID. Output sounds don't need separate declarations, just like other virtual instruments.
If you receive a Content ID claim tied to a specific Output sample, because another user's track contains the same sample, you can dispute it by informing the platform of the sample's source and quoting the relevant section of the Output Terms of Use:
All audio recordings, files, loops, samples, one-shots, and MIDI files provided and or generated in the Services ("Provided Content Files") are licensed to you on a royalty-free basis. You are granted a non-exclusive, non-transferable, perpetual right to use the Provided Content Files in new original recordings and/or compositions such as music or video productions ("New Work"). Therefore, subject to the License Restrictions, you may modify, reproduce, publicly perform, distribute, broadcast, sublicense, and otherwise use the Provided Content Files in a New Work, including for commercial purposes.
The legal rights to all Provided Content Files within the Services are owned by Output or third parties who have licensed audio content to Output for this specific use. All Provided Content Files licensed to Output are available to you on a royalty-free basis and do not require further clearance from the original owner.
For more on the dispute process, see YouTube's guides on submitting a copyright counter notification and counter notification requirements.
Copyright strikes
If you receive a copyright strike on music that contains Output sounds, you'll need to appeal it directly with YouTube. Include the Terms of Use quote above in your appeal. For more on how YouTube copyright strikes work, see YouTube's copyright strike guide.
Your music is yours go release it.