In short, no. When you turn on iTunes Match on your phone, nothing happens automatically. The key setting is in
Settings -> Music:
- Show All Music - if this is turned on, all music that you've uploaded to iTunes Match appears in the Music app on your iPhone. However, this music is not actually present in your phone's storage. If Show All Music is turned off, only music that is in your phone's storage appears in the Music app.
Once the Music app is showing your iTunes Match music, there are two ways these tracks will actually be stored on your iPhone:
- If you just start playing music, it will by default stream the track from Apple's servers (if you're not on a Wifi network, it will only do this if the
Settings -> iTunes & App Stores -> Use Cellular Data setting is on). When you stream a track, it will be downloaded to your iPhone and subsequently stored.
- If you tap the download button that appears when you view Albums or Playlists, the associated tracks will begin downloading from Apple's servers, to be stored on your iPhone.
In both cases, you retain control over what actually takes up space on your phone: only the music that you either choose to play or explicitly download. There are two other details worth noting here:
- I believe that, when space on your iPhone starts to get limited, iTunes Match tracks that have been streamed to your device may be deleted from storage to reclaim space (the idea being that you can always stream them again). I don't know whether or not tracks that you explicitly chose to download will also be cleaned up in this way.
- If the
Settings -> iTunes & App Stores -> Automatic Downloads settings are on, your phone will automatically download new songs (or apps, or books) that you purchase on your other devices. However, your existing purchases will not be downloaded automatically.