The idea is simple - and Spotify already utilizes the tech required to make this feature. It is similar to the way they create playlists like "Discover Weekly", "Made For You" playlists, and Radio features.
When you soundhound/shazam/add a song a friend recommends, and you like it, you save it. Listening from radio or discover weekly and like a song, you hit save. These songs get tossed in "Your Library: Songs" list. However, over the course of some time, you amass a giant repository of just random awesome music you like. And this list is in no particular order.
What if you could have Spotify sort through Your Library: Songs and create playlists from this list's content based on a set filter of your choosing - genre, "mood", "style" of music. This is just like the other features, but specifically with the songs from your saved songs list. As you save more songs, you can re-run this sorting option and have the new ones auto-added to previously created playlists, or have it create a new one if the song doesnt match the previously utilized filters.
This way, you can clear your songs list while having organized playlists ready at the go for recall. It allows listeners to use the Songs list in Your Library as a holding tank before using this feature to sort the music into relevant playlists.
This would help listeners auto-generate playlists that are curated for any kind of party, mood, etc, - specifically from your saved music list - as opposed to having to hand sort/create the playlists yourself!