What does "Add to Library" and "Remove from Library" mean in Podcasts? They're just podcasts. Episodes should be either downloaded or not downloaded, and podcasts should be either subscribed to not subscribed. But it seems an episode can be "in your library" without being downloaded, and a podcast can be "in your library" without being subscribed. What does that even mean?

(I'm referring to Podcasts on both Mac OS and iOS.)
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.