I don't think there are limitations on improvising around session tunes. The only borders are the skills of the improviser and the collective taste of the session players, i.e. being sensitive to the feel of the session as a whole. Our monthly session in Ditchling in Sussex has a wide repertoire of styles and, at times - when we have the sax, serpent, trombone and occasional trumpet - the folk stuff suddenly takes on a good New Orleans feel! We had "The Runaway Train" sung last Saturday - to the backing of Cajun accordion and assorted improvisers - and jolly good it was.