Sorry for the late response. Had been busy with exams.
So, I’ve tested what you said and got to the conclusion that theres no difference between putting m3u in folders within Playlist folder or Music folder. Also, the m3u. file doesnt need to have the folder name, as I previous stated.
This being said, I tested and I did what you said about creating other folder and put the songs and the playlists and respective folder there. Thanks to that I found the solution for it: put all the songs in Music directory (as I had previosly) and ignore completely the additional folders and the playlist folder that comes with the mp3 system. You can simply create the .m3u and put it in the Music Directory alongside with all the music, therefore it wont create any copies of the song.
Thanks a lot 
