Ah, a good question. The music both sets and reflect the mood within the story. Look at this line: " And these—the dreams—writhed in and about, taking hue from the rooms, and causing the wild music of the orchestra to seem as the echo of their steps." At first the music had mostly set the stage: to have music in this period meant money, and to have musicians during the plague meant an act of defiance. However, with that line about the dream, a reader can begin to see how the music changes to reflect what is happening in the story. It gets wild because things are falling apart. And when it stops, that's because the party (and life) is about to stop.
The music, i believe, represents the tempo of life. During movies you know when something is going to happen when the music picks up, or when it abruptively stops. just like in movies, the music in The Masque of the Red Death picks up when things start to happen. and when death finally hits, the music stops.