A "major 7th" isn't related to the Dominant of a key, in which the "7th" in question is an interval of a minor 7th above the root, and is within the scale of the key. A "major 7th" in the context of this discussion refers to an interval of a major 7th above the root, and is not necessarily within the key, although it can be.

Clear as mud?

This kind of chord is not indigenous to folk music, but if used judiciously and sparingly, in certain instances, it can be very effective. I know a few hundred songs, and I use it in only two of them.

As I say, sparingly and judiciously.

Don Firth