Retaining music after decommissioning device

You do not own the music that you obtain with an Apple Music subscription. You only lease it. That music is copy-protected and will get deleted once you cancel your subscription or let it expire. You cannot reformat it or copy it to any non-approved Apple devices. Sorry.

You can still buy music from the iTunes Store (with or without an Apple Music subscription) in which case you do own the music and can do whatever you want with it for as long as you wish (within the song's copyright limitations).

Buy music from the iTunes Store - Apple Support

See Use multiple iTunes libraries on PC - Apple Support and Turn on Sync Library with Apple Music - Apple Support. You might use the shift-start method to create a new library in a folder such as ..\Music\iTunes Local to distinguish from the existing library. You're going to want to set the library up so that it uses the media folder on your NAS. Check this is working correctly before you try to add any media. There is a bug that affect some users which causes the default location to reset. can go into detail if needed.

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The content on your NAS should be fine. One approach would be to import it into a new empty library that isn't connected to iCloud Music Library. That gets you all the music and you can check that it works. If you want to retain playlists, ratings, play counts, etc. then you should be able to add the tracks into the existing library, and the local copy should merge with the cloud link retaining all of the details. When you turn off Sync Library all of the locally stored media remains in the library. You can then cancel the subscription.

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