You can stream audio from Apple Music to other devices using either Bluetooth or AirPlay, depending on the device you want to play the audio on and the connection method it supports.
If you notice a device listed in the audio output options that is nowhere nearby, and you do not recognise or recall using that device, it does not necessarily indicate an issue with your iPhone. It is possible that your iPhone has previously connected to or streamed audio to that device through Bluetooth or AirPlay. The device may therefore appear in the available output options or suggestions based on previous usage.
If you select that device while it is not within range, or it is no longer available on the network, the connection will not be established. You may notice that tapping the device produces no response or that the audio continues to play through the current output.
Regarding removing the device from the suggestions: iOS does not necessarily provide a dedicated option to remove an individual device from these suggested audio output options. The available controls depend on whether the device is appearing through Bluetooth, AirPlay, or Siri suggestions. Disabling Siri Suggestions altogether may not be necessary and may not remove every such entry.
In general, if the device is no longer used, its appearance may eventually disappear from the suggestions as iOS updates its recommendations. However, there is no guarantee that simply stopping its use will automatically remove it after a specific period.
The appearance of an unfamiliar device in the audio output list, by itself, does not indicate that the device is currently connected to your iPhone or that someone is accessing your audio.
