I believe it still does that, but cannot confirm, because the way it syncs the stuff is kind of aligning the stars in a specific way. I've followed instructions and it never seemed to work quite right. It skips some, it dupes some, some might only work on the same network (even when everything is marked for offline)

I do have local stuff (mp3 based) on my Spotify still on my iPhone. Not sure if it is a relic of an old feature. But it's not the entire directory and it's not easy to manage.