Example? Much of Richard Thompson's recorded output. Dylan's early albums. Bert Jansch's early albums. Much of Ewan MacColl's songwriting (OK, I'm not a fan, but clearly grounded in the tradition nonetheless). Kate Rusby, where she uses traditional tunes with her own words, or vice versa...(actually there are quite a few people in the folk world today doing that). Some, though not all, of my own work. And in fact a fair few of the acts you might catch at folk club guest nights in the UK (though they're by no means the only ones doing it).