How does time machine behaves when the drive becomes full?

Let's say I have a particular folder, that has never changed, in the first backup, eg my MP3 music collection from 2009. (I know my important files should be saved elsewhere, but it's just an example).

I dont understand what this means: The oldest backup are deleted when your disk becomes full.

Does it means that when there is not any space left on the drive, Time Machine will start deleting my music ?

Obviously if there is no more space left and Time Machine wants to backup new files, it has to delete something. But what exactly does it delete ?