MusicBear, there are some hosts who - for their own reasons - will not play discs a singer brings in; whether it has a home-made label or a store-bought label.
As to
Karaoke Anti-Piracy Association (aka KAPA), you can read at their site what they prosecute. If you read closely, and review who they have gone after, you won't find a singer or a host who has the original discs somewhere. They are concerned about the real bootleggers who:
1. Buy one and make thousands of copies to sell.
2. Buy one set of discs and duplicate it for their other 10 rental Karaoke sets.
3. Buy one disc and make and give or sell copies to their customers.
You can read the
US Copyright Law excerpts, especially on the Offenses and Penalties. It is very clear what each offense is, and making and using a backup copy is not on the list.