Have you read https://kodi.wiki/view/Playlists ?
lol - wow - I kept my wiki search as simple as possible and used "playlist" and did not find that page. I appreciate the pointer.
I have successfully created a playlist and can open it via the standard context menu for playlists.
Kodi:~/.kodi/userdata/playlists/music # ls -la
-rw-r--r-- 1 root root 86966 Dec 7 17:28 Christmas Tunes.m3u8
Kodi:~/.kodi/userdata/playlists/music # head Christmas\ Tunes.m3u8
#EXTCPlayListM3U::M3U
#EXTINF:151,13. Bing Crosby - Christmas Dinner Country Style
/var/media/Media/Music/Christmas Tunes/Bing Crosby - Bing Crosby's Christmas Classics/Bing Crosby - Christmas Dinner Country Style.flac
#EXTINF:167,11. Bing Crosby - Do You Hear What I Hear?
/var/media/Media/Music/Christmas Tunes/Bing Crosby - Bing Crosby's Christmas Classics/Bing Crosby - Do You Hear What I Hear.flac
#EXTINF:136,09. Bing Crosby - Frosty the Snowman
/var/media/Media/Music/Christmas Tunes/Bing Crosby - Bing Crosby's Christmas Classics/Bing Crosby - Frosty the Snowman.flac
#EXTINF:188,08. Bing Crosby - Hark! The Herald Angels Sing / It Came Upon a Midnight Clear
/var/media/Media/Music/Christmas Tunes/Bing Crosby - Bing Crosby's Christmas Classics/Bing Crosby - Hark! The Herald Angels Sing - It Came Upon a Midnight Clear.flac
#EXTINF:172,02. Bing Crosby - Have Yourself a Merry Little Christmas
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But non-function weirdness continues. The playlist still only plays one song and quits. If I start a song and let it complete it just exits. If I start a song in the playlist and hit "next" it just exits. If I play 7 or 8 random songs in the playlist (by opening the playlist and selecting them), then use the left context menu to look at "current playlist" all I see are those 7 or 8 songs - the playlist I created and selected seems to be gone from the playlist.
I still don't know why the default behavior of playing all files in a directory was removed, but it's gone, so I guess it's gone.