Music and fading have never worked on my SheepShaver build for some reason.
This is a symptom of pre-2013 Sheepshaver builds which lack support for the gamma ramp functions frequently used for fade effects. The main indicator is the screen being visible instead of black during sleep (you can see how the time & location pane updates live). Those older builds were also more likely to stumble over audio, and a number of games like EV Nova and Ferazel’s Wand will crash.
E-Maculation’s forum has a nice collection of recent builds if you’re looking to update. 🙂