Back in the late 80s, when we still had the Computer Museum in Boston before its remains got shipped off to California, I remember a display they had with computer generated music. It would play a MIDI track that was either from some classical composer (I forget whether they used Bach or Beethoven) or was generated by the computer in the same "style", and you had to guess who had written it. Since they obviously excluded the really obviously recognizable pieces, it did a surprisingly good job of fooling the general public, and the running tally at the time was a bit under 60% accurate. I personally did substantially better, because I was taking classical piano lessons and hearing that kind of music all the time, but even that long ago they were doing some interesting work.
Some of the dynamic music systems in games these days are pretty crazy, too. They might not quite be at the procedurally generated level, but go look at how they did the music in something like Portal 2. I'm not sure why they went through that much effort, because most of the music in that game blends into the background so much that you'd never even notice if it sat there looping for hours, but it does let them do some kind of neat reactive "musical sound effect" things in some places.