"on the UK Folk Revival Scene, from experience, I'd say [improvisation] is pretty much anathema, although there's bound to be exceptions."

If you're talking about spontaneous variation (see Tom B's post above) then you could include not only Irish instrumental music but many English practitioners of fiddle (Swarbrick, anyone?), box, etc., and an awful lot of modern ceilidh bands. Many singers from Sam Larner through Bert Lloyd to Peter Bellamy and Nic Jones have varied the vocal melody significantly and unpredictably. The Devil's Interval, for one, improvised their harmonies on the spot, varying from one verse to the next. Quite a few exceptions!