Where do I put custom disc sprites? I tried assets/musicnotification/textures/gui/sprites/toast/that_expanse.png and it failed to use it.

this is on version 1.20.1-2.0.1

I've added easy custom disc sprites only in 1.20.2, for this version you need to replace the toast textures (/assets/musicnotification/textures/gui/toasts.png) and add your custom discs below the existing one. And in your musics.json instead of using cover you need to specify the x and y coordinate of your disc using coverTextureSlotX and coverTextureSlotY.

I've made an example resource pack that can be found here and the docs for this version here