What you don't seem to understand is that individual creativity is just a part of an ongoing process by which a folk song develops - changed and shaped, deliberately or otherwise, by the singers through whom it passes.

I understand the theory well enough - I just don't agree with it. Individual creativity is the whole of the case; that is, the very particular creativity of the individuals through whom it passes.    The songs were likewise created by individuals, and individuals recreated them according to their own needs and requirements. We can see this process at work today in individual singers & performers, and I doubt very much that it's ever been any different.

I don't understand what you're saying here - you seem to be contradicting yourself. A folk song - traditional song if you prefer - arises when individual takes a song and changes it (whether by a deliberate creative act, by mistake or unconsciously), and another individual takes that changed version and makes their own changes. Where someone simply takes a song and makes their own arrangement of it, that's a cover. You can't look at the individual in isolation, a folk song is the sum of a number of individuals' creativity. What bit of this don't you agree with?

To go back to an earlier example, we have simply no way of knowing how much of John England's version of "Seeds of Love" was his own creation and how much of it came from the singers he learned it from. It is stretching credulity to imagine that the song came entirely from his own imagination, entirely independent of the other versions collected from other singers.

You haven't answered my other question: when the words you have used to describe the music at your club are perfectly adequate, what is added by throwing the label "folk" over it all?