SFX volume is pretty obvious, it controls the volume of your powers.
Music volume controls in-game music volume, which I believe also includes ambient sounds. I'm not in-game right this moment, but this can easily be checked by entering your base or parking in an out of the way place in a zone to minimize noise from other players. Every zone and neighbourhood has both music and ambient sound that plays, so you should be able to tell if adjusting Music volume affects them. Just make sure your toggles are off when you do.
I generally have my volumes set at 3%, I can still hear them but they don't drown out vc with my friends. If all else fails, you can always edit sfx that you find particularly bothersome.