I don't disagree but I would say this is half the story. Music theory is a way to describe the patterns that have emerged over centuries of musical developments. As you say, you can't generate "good music" through rote use of these formulas. But the formulas provide a context both to explain what's there and ALSO to create new music within that context. Musical interest comes mostly from using and abusing these rules. For example, I can predict ahead of time that if I use a V-I progression there is going to be a sense of tension and then release in the music. There is (probably) no scientific reason for this. But scores of other composers have adhered to this principle and so we all understand this concept. And by recognizing this I have a tool with which to control the level of tension in a musical passage.

I think it goes both ways. Historically, most music theory has arisen after the fact to explain why music written a hundred years before sounds good. However, it is possible to discover some particular mathematical structure in music and then generalize to create new previously-unknown forms of music. There's a certain degree of artistry to this, so it's hard to say where the science ends and the art begins. To an outside observer it may look like someone just randomly made noise until something "worked".

Personally, I think western music is stuck in a 12-tone-equal-temperament rut. It's not as if we've discovered all possible 12-TET music, but it's getting harder to find anything truly novel harmonically or melodically. (Timbre and rhythm are still good ways to innovate within 12-TET.)

In my view, this isn't entirely accurate. On some occasions, musicians have invented theories for prescriptive use, for instance to overcome a creative roadblock. I think that modal jazz and 12-tone systems are examples.

Noting a neighboring comment, theory may not be necessary for composition, but some specific forms of composition may be prohibitively difficult without theory. I have musical colleague who composes multi part jazz harmonies for small to large ensembles. They are steeped in theory.

On the other hand, my spouse attended a seminar given by a fairly well known film composer. She asked him if he followed any particular school of theory, and he said no.

I think another aspect is that music theory is absolutely not required for appreciation nor composition.

It's just a framework. Like music history, ethnomusicology, music cognition, music lessons, instrument building, etc., it will deepen one's appreciation for music if you learn it.

As far as composition-- I've had some encounters with talented musicians who get stuck putting together a song or electronic composition because "something just isn't sounding right." In those encounters, a process of elimination improved a chord/voicing that an understanding of fundamental music theory principles would have revealed without my help.

The problem is that without the fundamental understanding, it's nearly impossible to reverse-engineer such an improvement and deduce the general principle at work. Lacking that basic understanding makes one reliant on others just to figure out how to get the sounds out of one's head and into the air.

so glad to hear someone else say this! i always feel compelled to point this out. fist bumps you