Hi,

My ideas are as follows and some probably already mentioned.

Firstly - I do acknowledge that playing copyrighted music is a risk taken on when it is played, whether it's in-game or nightbot/itunes/spotify or other media player.

In the past, VODs were muted with a red bar on the bottom of VODs to show where copyright-flagged audio was detected.
I would advise going back to this and adding some sort of mouse-over tag so we can see what track/s were flagged and by whom so that it can be contested if necessary to ensure no abuse of the DMCA system.
Twitch auto-deleting content is ill-advised as streamers have literally no comeback in the event a false claim is issued.
Some sort of manual review process for DMCA claims where action against a Twitch channel may be required so streamers have some sort of opportunity to defend themselves. They are your community afterall, at least enable them instead of sweeping the problem under the rug by deleting stuff or whipping out channel bans because there is inconsistency with this.

Lastly - Holding streamers responsible for copyrighted content on already deleted VODs shouldn't be a thing since they no longer have control over them. It seems that VODs are stored on Twitch's server even after deleted by the streamer so some sort of protection here would be nice, or at least lock if off from external review if you NEED to keep VODs beyond their deletion period for legal reasons.

Lastly part 2 - I do agree that the Digital Millennium Copyright Act does need a review to adapter and modernize how we listen and share music in this highly digital age.
I'm no legal expert so I don't have any suggestions on this, nor is this Twitch's issue specifically but I think it is a shared sentiment and hopefully one we can look forward to being worked on to prevent such take-down storms from happening in the future.