None of the above. It just isn't designed to prove a causal relationship.
I don't know enough to give a credible critique on the methodological details of this particular study, but in general, observational studies can tell you if there's statistical correlation between variables but cannot tell you cause and effect. The study shows with good confidence that people over age 70 who regularly engage in musical activities have a decreased risk of dementia and cognitive impairment when compared to those who do not regularly engage in musical activities. It does not, however, prove that musical activities directly cause the risk reduction.
In other words, introducing music as an intervention in the latter group may be ineffective because it could be that it's only a symptom rather than a causitive agent.
The purpose of such a study (to my knowledge) is often to identify things that may be worthy of further investigation. It's much more time consuming and expensive to run a trial capable of establishing causation, so observational studies can provide guidance as to what might have a chance of showing a positive result. A large observational study may be the best we'll actually get for something like this, unfortunately. There's not a lot of money to be made, so securing funding for a proper trial is probably unlikely. On a brighter note, the risk of harm is low—if it turns out that it doesn't really work, well, at least some people will have enjoyed the music.