The first Brennan B2 units did not contain an internal HDD but rather used a larger SD Card to hold both the Music and the B2's operating software.
In time Brennan began producing B2's with large internal HDD drives to hold the music and "moved" the music folder off the SD Card. However they still need an SD Card to boot up the little Raspberry Pi computer round which they are built (as this is how a Pi works).
Thus for backwards compatibility with older units (which may still be working and benefiting from software updates) the ability to use the SD Card as a music store remains. It is ALSO used as the place where music is stored when using the "line in" method to record analog music (vinyl or tape) on a B2 before staging this on to the HDD.
As for why your B2 switched to using the SD Card for music storage, I suspect that as you said you:-
"
I have noticed that sometimes the CD-drive doesn't read the CD when inserted, this has been overcome by switching off and on with the switch at the back, "
is probably the cause.
The B2 is a computer at heart and it does things you do not know about/see as part of its operation. Suddenly switching the power off can interrupt an important background activity and may change the state of the system on next boot, even making it impossible to boot! That is why we, here on the Forum, keep pushing the need for users to shut the B2 down gracefully rather than just powering off. It is ALWAYS a bad idea to simply pull the power on any operating computer!.
Fred