Not enough demand to make it worth adding an historic area which the current system isn’t currently able to handle very well anyway.

Reopen only if you have a strong interest into the music of this area and want to enter a lot of data about it.

Not necessarily this way, it doesn't seem to be an "administrative" division of Malaysia.

Initially, Malaya was just needed as the birthplace of Jolyon Jackson. Since it seems difficult to add it at the moment, annotation will do meanwhile. Anyway the surroundings doesn't draw attention, for example neither Borneo island nor local instruments have been requested so far. If someone has to add local music (artists, works, ...) later on, there would certainly be better suggestions about really needed areas then.

Now those 2 regions would fit within our current system and would fit between the country level and the 16 states/territories, does that make sense to add another level between those 2?

What about Peninsular Malaysia instead?
It is the contemporary name of the same region (featuring as many states and two federal territories).
Malaysian Borneo (featuring two states and one federal territory) complements the modern Malaysia.

I won't be adding this, I doubt it will be added.

We haven't been doing any historical areas, the just increases the difficulty many times over.

Any area has had dozens, hundreds of borders/names over the course of human history and is outside the scope of what we are doing here.