If the box you see on this screen capture is ticked - copy files to iTunes Media folder when adding to library (you'll find this under Advanced in iTunes Preferences) - then each time you try to add anything, then iTunes will faithfully make a copy. Even when the "source", the files you're adding, are in the same folder as the "destination". Each time you do that you'll double the size of your library.
My client has a music system that monitors the iTunes library from its own controller software, in the same way that Sonos is structured. My guess is that this is what happened.
Client plugs in the hard drive. Sets up his controller software and in essence points it at the USB drive, but the wrong folder. His music doesn't show up. So he goes into iTunes to use that to move his music to where he thinks it should be. Misunderstanding the function of the box above he ticks it and then Finds his music on the local hard drive and lets the process run. Even when complete the music doesn't appear in the other app so understandably he thinks the process has failed, so he does it again. He probably tries to copy the music to another location on the drive, thinking that's the issue, tries that a time or two. Each cycle iTunes is doing what it's been told, merrily copying files to the drive.
Finally, drive full, no music in other controller app he gave up. Actually the library should be .4Tb and our de-duplicating program took a whole day to find and clear our the surplus music files. Then we could get onto the substance of improving the metadata, adding album art and so on.
If you're looking at your own library should you tick this box? In my opinion NO. It can create more problems than it solves. Instead, adopt a two step process when adding tracks.
First, use Add Folder to import the new tracks into your iTunes database. Take a look at what you've done and make sure you're happy with what's happened. When you are, step two, go to File / Library / Organise library and tick the box for Consolidate. That will then copy the file(s) you've added from their source location and put them in your music library.
If you have a system such as Sonos the automatic update cycle will then find the new music when it runs next, or you can usually force an unscheduled update if you need.
And you won't need to call on us to rescue your music.