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I had the same problem using Netgear NAS. Solved by creating playlist directory under music files. In your case: /home/pi/music/playlist.
I have also set up LMS on a pi as it looks like you have. Again, same problem with playlists. Solved, and this is important, change permissions to 777 on the directory containing the playlist. You can use Filezilla (free) to accomplish this. Good luck.
Transporter, Squeezebox, 5 Pi for receiving LMS, 1 Pi for LMS and receiving LMS
Previous to Max2play, I cobbled together my own receivers for LMS…Max2play makes it so much easier