I don't recognise the situation described by the OP as describing the scene where I live.   The difference is not so much between singarounds and "guest clubs" as between singarounds and clubs in general. True, well paid guests themselves should be more proficient than the average performer (though there are many "professionals" that I'd go out of my way to avoid) but the heart of my "folk world" is the fact that it belongs to us ordinary folk, not to a set of paid entertainers and, within us ordinary folk, the singarounds tend to come out on top of the clubs if you're looking for quality (paid guests excluded).

I don't tend to class the singarounds I go to as clubs becuase they're not private, they don't have a membership as such, they don't have an admission charge etc etc. The singarounds happen when groups of friends get together, usually in the bar or an open side room and take it in turns to sing. Anyone is free to wander in or out and, usually, newcomers are asked if they sing.   Only very occasionally does anyone have words written down and they soon pick up that it's the norm to actually know your material rather than read it. In some of the singarounds the songs are sometimes interspersed by comments and questions about a song's origins and background while in others it tends to be just songs with no discussion. I think they all work though because they have a core of people who work to know and respect the songs they sing and who sing them to the best of their ability.

I occasionally go to folk clubs (which may or may not book guests as often as once a month). Most folk clubs however seem to cater for a wider range of tastes than the mainly traditional singarounds, including Americana, blues, 60s/70s songs etc. I find these songs less to my personal taste so go less frequently. It's also these places that tend to have the "go to the front and perform two numbers" set up which seems to encourage those who like their music stands and words in front of them. I also get the feeling that they're more concerned with the image they present as entertainers (despite needing prompt sheets) than with the actual material they're singing. Professional or amateur, for me, if a singer respects the song it's likely to work; if they're just using the song as a vehicle to promote themselves it doesn't.   Not learning a song is no way to respect it.

I have a feeling that the OP may be referring to open mic events though. These I do my best to avoid entirely. Not only are they likely to have word sheets and music stands but PA systems and even spotlights. Again it seems the performer takes precedence over the songs and often once they've done their turn they'll leave. I don't personally think these events and performers have anything to do with the "folk" world that I know: I see them more as role players in a fantasy gane where they're imagining being famous pop stars.

I believe the OP makes or made a living at least partially as a paid guest at clubs. It's possible that he rarely found/finds the singarounds I've described as, unlike the clubs and open mics, they are very local sessions in out of the way places, often not advertised except by word of mouth. They'd probably be of little use to someone who needed to make money out of bookings but I'm sure he wouldn't be disappointed in the quality if he found some of them. (I believe even Messrs Carroll and Edwards might enjoy an evening at one or two (though perhaps not on the same night as GSS) as they are definitely within the "traditional idiom" even when they occasionally stray from "true folk".)