The idea is to make the audio file quick to download, and bare in mind that people are playing a game with multiple channels of extra noise on top, so audiophile quality is pointless.
traditionally a UMX is a tracker module made up of many small wav loops (UT has always played music as WAV), so is the preferred optimal format for old games with smaller DL requirements.
It was discovered that you can trick a mod creator program (eg. OpenModPlug) into accepting just 1 long sample of a whole song, but to keep the size sensible (+50MB is too much to expect people to download, if the rest of the distro is 2 or 3 MB) we have always reduced the WAV to Mono, 11kHz, 8bit.
As you can expect, this makes complex music sound like crap, but people still do it.
If you love the production side of music, then have a play with
https://openmpt.org
It is how we used to make computer music before things like Fruityloops.
Technically it is the same thing, but scrolls up the screen instead of across.
Open a UT UMX file with it and you will see you can re-edit or export specific samples.
Watch it play, and you will see how it works.
Over at OldUnreal, Smirftsch made new audio renderers to support new hardware, and has continued updates to include more functionality.
Currently it uses libxmp.dll and supports everything it does (and yes FLAC is supported)
http://www.oldunreal.com/cgi-bin/yabb2/ ... 1399614690