The problem with definitions is that they change and morph. I think that the 1954 definition has merit but must be looked at as only one valid definition.

For example, in my definition I would include American jazz. It is culture-based in its origins, changes with new environments, includes variants on tunes, transmitted aurally as well as through theory, suggests a cultural environment which has mutated over time,
has a tradition and history going back to the inception of our country through the plight of African-Americans in slavery, is now international in scope to include many players and listeners and overlaps with popular music.

What is problematic is the exclusivity clause written into many folk definitions that is too rigid, too narrow and tending toward being precious.

I see folk music as tending to be more inclusive, allowing for more participation and less restriction, away from concert the approach which isolates audience from performer.

Also, just because it is folk music doesn't mean that it's necessarily good music. Some of it is doggerel, trite, uninteresting, and worshipped for its classification rather than its music.

Then, the enduring folk music is from a wellspring of human experience that transcends all theoretical bickering about what it is.