Just thought I could remove the melody instrument and save as song.
Below is how I created the mgx file.
This is where things get a bit confusing. As you already seem to know by unchecking MIDI channel #4, BIAB's Melody track transmits MIDI on channel 4.
When the a MIDI is loaded, though, and the Melody track is in multichannel mode, things are different. Each of the channels in the MIDI file are transmitted on their own tracks. From the image you included (thanks for that it helps heaps), you have the contrabass (string bass) being sent on MIDI channel 4. The cello is on MIDI channel 3 and there are two instances of acoustic guitar, one on channel 1 and one on channel 2.
Most often with MIDI files, the melody of the file is on MIDI channel 1, drums are on channel 10 and other instruments are spread across the remaining 14 channels. Looking at your image, I would activate the contrabass (channel 4) and uncheck the acoustic guitar on channel 1. See if that stops the song's melody from playing.
After you've done that, though, if you have a BIAB backing active, regenerate the song so that the new settings are implemented.