Unfortunately I have known about this for a while. Someone mentioned it in the comments of an article somewhere. I dug up a couple related articles. I found others but most of them covered what was already in the Chicago Tribune one.

It was banned by an Australian girls' school in 2016: http://archive.is/992uf

Chicago Tribune wrote a great article about it. Here are some of the highlights: http://archive.is/Ttsi9

CEO Alex Zhu acknowledged that "a lot of users, especially top users, they're under 13." That's a violation of the app's terms of use, and potentially puts Musical.ly in conflict with federal child privacy law. http://archive.is/Ttsi9#selection-239.42-239.252

A Musical.ly spokesperson told the Tribune that COPPA [law that requires users to be 13+] does not apply to the app because it is directed at a general audience. Despite [CEO] Zhu's comments in London, the spokesperson said the company doesn't know how old its users are. http://archive.is/Ttsi9#selection-369.0-369.229

[A Parent] deleted Musical.ly from his 10-year-old daughter's iPad three months ago after watching a streaming video in which a young girl was bombarded with sexual requests (comments and emojis scroll across the screen during a live stream). He relented after ensuring that only his daughter's friends had access to her videos — a move that culled her fan base from 300 to 36 http://archive.is/Ttsi9#selection-399.0-403.208

Buffalo Grove police encountered a malicious use of the app last year when someone posing as a child communicated with a 9-year-old girl via Musical.ly and enticed her to send nude photos. The phone used by the girl's correspondent belonged to a 24-year-old man, said Deputy Chief Roy Bethge. He said the department wasn't able to bring charges against the suspect for reasons he couldn't disclose. http://archive.is/Ttsi9#selection-411.0-421.105