We're quibbling Jim between a definition and the definition, the one that nails it for now and ever. A dictionary, when it gets round to the matter, will include both your terms if they're shared by enough people and hold up without academic dissent and the one used by music companies and shops - which will mean acoustic music and singer songwriting. Both will fall into common use.

I appreciate we're back to the 'what' is instead of 'who' is so I won't labour the issue. People can be aware of and fully understand the 'traditional' or 1954 sense of folk without necessarily agreeing with it or seeing flaws in the definition. It's not a lack of comprehension that stops some people coming on board - which is why a repetition of 1954 ad nauseum fails to round things off - or intelligence, it's context and the framework now points towards a more inclusive sense of what folk is, backed up by recording categories, festivals line-ups, the media and the rest of the social machinery that defines these things to the satisfaction of taxonomists.