I am not sure where you ot the impression that the folk process did not apply to material that was copyrighted. Copyright simply is the right of authors to profit from their work by licensing it's commercial use. It may offer a limited ability to control changes and variations in a song presented commercially, but in practice, it is difficult to control that. There is no legal way for an author to prevent any sort of non-commercial variation of a song at all.


Here is description of the "Folk Process", from Wikpedia. It is not the final word, it is just an attempt to describe something that has been observed to occur.

"In the study of folklore, the folk process is the way folk material, especially stories, music, and other art, is transformed and re-adapted in the process of its transmission from person to person and from generation to generation.

....it is the act of refinement and creative change by community members within the folk tradition that defines the folk process."