Watch these things:

A folk concert, a traditional jazz concert, a modern jazz concert, a country concert, a rock concert, a blues concert, a classical concert.

How would you regard the show if the professional musicians were playing from the dots? Do we see Keith Richards with a music stand and a score?

The odd one out on the list is the classical concert. Here, we have large numbers of musicians playing fragments of music which fit together to make a whole. There are long rests, and very precise phrases. You can't have half a dozen violins all playing something "broadly similar" in an orchester.

The other genres have individual musicians, sometimes working as teams, sometimes completely solo. As long as it sounds good, it doesn't matter whether they play each phrase exactly "as written". It might not even be possible to write some phrases accurately without resorting to extremes of dots, ties and slurs.

So for folk musicians (and jazz, rock, blues, country, etc.)the ability to read and write music is more or less irrelevant to performance. It then becomes simply a useful way of remembering or transmitting tunes when there isn't time to memorise them or play them repeatedly.

I've always played by ear, but I have enough reading/writing ability to work out or write down the basic shape of a melody. It helps, but it isn't vital.