Library not syncing from Mac

My library on my Mac has stopped syncing correctly. If I add a song from Apple Music it appears on my iPhone, but if I add a file to Apple Music (mp3, m4a) it doesn't appear.

If I select File > Library > Update Cloud Library it tries to sync but comes up with the below error

Cloud Music Library can't be updated because Apple Music doesn't recognise your music library.

My Mac is running macOS 12.6 and Apple Music 1.2.5.7

Any suggestions would be great.

Thanks