Not true. I hear it used in the manner described in the OP all the time. I understand how it’s currently used.
It’s a combination of generalization and specialization that I’m thinking of. The usage defocuses to include more meanings, but then refocuses in on something different than the original. I.e., A → A+B/A+C/A+D → A+B → B. I suppose this alternating pattern is probably common and allows meaning to travel great distances.
Here are two fun examples (just read the few paragraphs of text):
At the risk of having the question of “what in the hell is a vtuber?” raised, here’s an example of the modern usage of ‘lowkey’ in the wild; Enna uses it three times in under three minutes in this clip. Enna is a Canadian vtuber of Philippine descent in the vtuber group Nijisanji; she is probably in her 20s. Enna meets a Hot but Nerdy Watch Salesman with her Mom - Nijisanji EN - YouTube
Good example.
FWIW, I’ve been professional musician for over 50 years playing jazz, latin, pop, rock, orchestral music etc and I have never heard anyone use the term low-key in relation to music. In fact I’m pretty sure no one ever has because it doesn’t make any sense. There’s 12 keys, you can go up or down to get to any key and it doesn’t make any difference. I suspect people who think the origin comes from there are just wildly guessing 
I’ve never thought the term had anything to do with music. I’ve used it with photography since I remember taking photos, and as part of an expression since forever (I’m 50, so my “forever” may be less than yours.)
However, the speculation is that it does have something to do with music and sound: