A similar problem occurs on my Windows desktop Spotify (126.96.36.199): can't remove Library items; these items are neither flagged, part of a playlist or existing locally (as I understand that these properties affect 'deletability'). The context menu keeps showing me a greyed out delete option.
Hi. Files shown in the library must be either local files or included in a playlist. If the have a note symbol in a rectangle showing, they are local files and you should be able to delete them from the local files view. However, this will only delete them from your library, not physically from your desktop and will be reimported the next time you restart spotify unless you uncheck the imprt options in settings.
Another way to identify local files is if right-clicking shows the option to open the containing folder.
I did some experiments, and things became clear to me:
A 'title' (record, item) in the library is either a favorite, a local file or part of a playlist (created by yourself); deleting is not possible explicitly, but can be done by deleting a file on the other lists, or if the item is marked as favorite, it can be deleted from the library by 'unstaring' the item. Not directly intuitive, but workable..
Somehow I've managed to Sync my iTunes library into my Spotty Library and Local Files. I don't want them there. Anyone know how to remove them/un-sync?
This also happened to me. I tried following your instructions below but after unticking the Local File source boxes and returning to to the 'Local Files' tab there was nothing in there. However, if I go into my songs all the songs from my itunes library are still there. Please help!