What does "Add to Library" and "Remove from Library" mean in Podcasts?
If you stop listening to a show for a while, Apple Podcasts might pause your subscription. The shows and downloaded episodes stay in your library, but new episodes might not be updated. To continue getting new episodes, subscribe again.


and 


  New episodes won't download to your device, but episodes that are already in your library won’t be deleted.


https://support.apple.com/en-in/HT201859#more

To me, this looks like a sweet spot with a collection of all relevant material, since you can search in your library separately(not globally) and it is synced across devices. 

Also, not verified, but autoplay might be using library too.