When people need to distinguish between concepts, words are their tools...'folk' & 'traditional' are such attempts.Often, people with different concepts use the same words, leading to confusion and disagreements.
...Since I my wife & I do 'crafts' for a living, we run into this on a daily basis as we apply to shows.Some shows are changing their names and advertising to distinguish between high end, creative, 'artistic' stuff & what is starting to be called 'country crafts'..i.e., painted windmills,pattern cut-out toys, and paisley oven mitts. The distinctions are necessary, but the words available are limited, just like in folk music....and yes, the lines DO blur at certain points...and it will always be necessary to use extra words to explicate your meanings if the distinction is 'important'. In this thread, I rather imagine S&K would be glad to see songs about Rembrandt, as well as about barrel-making.