I wonder if the Muppet Morsels were written before or after Disney went after the owners of the various songs, including cut songs. The Muppet Morsels never mentioned any songs that were cut from the DVD (then again, it might be weird for them to be mentioned, and Disney might not have wanted casual fans who didn't know about the missing scenes to be annoyed by reading about what couldn't be shown). If morsels were written before music rights were given permission for, then it would be interesting to see what the morsels would have said about various scenes. I'm sure that All of Me and You've Got a Friend would have had quite a few fun facts given.
I've been thinking about how the Vincent Price episode was uncut on the time life release but not in this set. I wonder if Time-Life made certain deals with the owners of certain songs that either limited the time for song permission on the episodes, making them expire, or if Time-Life made a deal that the songs could only be incldued on the Time-Life releases (and Columbia versions, though the volume with the Vincent Price episode was skipped), therefore causing Disney to have to get the rights to each song a secodn time.
When the compilations were made, I think that all music rights were only bought for the use of those compilations, and not for any video releases of full episodes, therefore making Henson (and Disney) have to pay for the rights again. With the compilations, if any music rights owners said no to certain songs being released, at least they weren't full episodes and nothing would be forced to be included.
I have noticed that none of the first season songs that have been released on various albums were cut.