Steve:
As you suggest, there is nothing whatever 'wrong' with singers altering songs to suit themselves (and the times). The problems arise when they make academic claims on what they have created.
I believe Bert Lloyd did this a lot, hence the somewhat confused legacy he left behind.
On the other hand, I don't think MacColl did this to any great extent, though he was somewhat vague at times regarding his sources.
I confess I used to suspect his claims to his family repertoire but after conversations I had with his mother and with some of his contemporaries in Manchester, working-class historian Eddie Frow for instance, I came to the opinion that he never sought to mislead anybody; what he did do was to reconstruct some of the songs he heard at home.
This was confirmed for me by D.G. Bridson's description in his book 'Prospero and Ariel, of the 'discovering' of MacColl in Manchester in 1931.
"MacColl had been out busking for pennies by the Manchester theatres and cinemas. The songs he sang were unusual, Scots songs, Gaelic songs he had learnt from his mother, border ballads and folk-songs. One night while queuing up for the three-and-sixpennies, Kenneth Adam had heard him singing outside the Manchester Paramount. He was suitably impressed. Not only did he give MacColl a handout; he also advised him to go and audition for Archie Harding at the BBC studios in Manchester's Piccadilly."
After all, if Traveller John Reilly could give us 'The Maid and The Palmer', 'Lord Baker', 'Lord Gregory' (Lord Googly) and a dozen or so other ballads, there's no reason to doubt MacColl's claims.
Jim Carroll