Interesting. I'm more of a musician than a singer, and more of a unicyclist than a musician, so I'm not supremely well positioned to comment, but I'm not sure that "interpretation" is the right word for what you do to a folk song.

You "interpret" a piece of art music, or a play. Shakespeare in modern dress is interpretation.

You "rework" a jazz standard.

You "cover" a pop song.

A folk song, you sing.

That doesn't mean that you sing it identically every time, but if you start deliberately "interpreting" it, maybe you're using "folk" material for an "art" performance.

I think that each singer finds a way of singing a song that suits his or her style, voice and limitations. As they improve (or deteriorate) their way of singing may change. However, in a folk context, the way a singer sings a particular song develops rather than changing suddenly.

Recently, I've been trying to find a version of "Lowlands" that suits me. I looked at the various versions in Mudcat, listened to the version on a CD I have, cast my mind back to versions I'd heard over the years in folk clubs and Morris sessions, then sang it lots of times. Some verses didn't suit, and some phrases fell wrong to my ear and to my voice.

I took the various bits I liked, chucked out the bits I didn't need and I now have a version that tells the story to my satisfaction without any extra flowery bits. Now I'll just sing it. I won't interpret it. Or perhaps the bit I've already done is the interpretation?