It is really a gray area, because from what I know, legally we are not allowed to cover other people’s music without permission or financial compentation. That’s the law itself.
But in reality it’s a bit different. Most creators that (excuse my french) aren’t stuck-up are actually happy to see fan-creations of their work, as long as it isn’t derogatory, or making money, even though some creators will accept one on one comissions. I have yet to make any musical covers but I’ve often made fanart for a video game, and I’ve had people who work at the company applaud my art. I also participated in a birthday gift for the director of my favourite movie, and he was equally appreciative, fan-creations have always existed, and they are hear to stay
So it’s not really the creators themselves that have a problem, but the legal higher-ups.
Of course if you find a karaoke version of a song it’s a bit different. There are these 2 channels on YouTube, called sing2piano and sing2guitar, and they arrange and record their versions themselves. They welcome people to use their versions, under the condition that you give them credit, and don’t monetize your video. They also note that the publishers who have the right to the composition might have a different point of view.