I was affected by deactivation of the app due to license issues many times in the past, but I always explained it to myself that I probably reinstalled or updated the app via Google Play before and forgot to validate the app online. Now I had the same issue and I'm very sure that nothing from this http://support.powerampapp.com/knowledgebase/articles/323557-is-internet-connection-required happened. Luckily, I was able to note what exactly happened.
I've always used wi-fi connection to go to internet. That's how my last activation was made. Now I had to use mobile data connection for a while and did not launch the app during this period. My data limit was exceeded and I had to turn my data connection off. I did not go online or launch the app since then. Today I was offline, listened to music via Poweramp and it got deactivated again due to license issues. Luckily, there was a wi-fi connection available, so I turned wi-fi on and solved the problem. But in many cases, I get license error and have no chance to get connected to the internet, so I have to use default music player with poor sound quality. That suck pretty hard. If I had permanent connection, I would use Spotify, not my own offline library played in Poweramp.
If you as a developer cannot fix the licence issues, please don't punish us, your paying customers, by making playback impossible. There are less invasive ways how to limit operation of the app if it is not activated, like prohibit library changes or settings changes.
I listen to music stored on SD card via Poweramp 2.0.10 build 588 on my LG (Optimus in some territories) L90 D405n with stock Android Lollipop 5.0.2 (the latest official release).