I believe the initial scene of Eyes Wide Shut is an example for this. I am sure I've heard a fancy term for the use of a piece of soundtrack that turns out to be heard within the film itself. How is that called?
TVTropes has other terms for various incarnations of this, some of which are probably "official" and others probably invented by the site's community, e.g.:
- 'Interscene diegetic': when the same song plays continuously, in-universe, across multiple scenes.
- "Left the Background Music On": a specific diegetic switch where the music starts out as background music, until one of the characters "notices" it and it becomes diegetic.
- "Theme Tune Cameo": (the other answer that gave this seems to have vanished) a specific form of diegetic music where it's the main title theme that later appears in-scene somewhere.
Any music heard as part of the 'reality' of the film's universe is called Source Music. I've never heard anyone say diegetic music on a production.