If councils do not wish to prevent participatory folk events taking place, they cannot maintain that members of the public are performers. For this means that they can hide behind and enforce a law that was never intended to prevent such events.
By their actions they are clearly demonstrating that they positivly intend to prevent participatory folk events.
They cannot have it both ways
They have a duty to encourage such events are are ignoring many other of their statatory duties
OCC's position that they have to continue to treat future events badly because it would be unfair on those that they have treated badly in the past, sounds like a bad Monty Python scetch.