Is Bob Dylan folk music? In one way yes. People are familiar with his work which is based as was Woody Guthrie on a body of traditional work. So this fits the theory of songs being changed to fit different times.
Does his songs resonate with a large population who likes to sing his songs? Sure.
Bob has done his homework in that he knows who the trad singers are who have influenced him.
He is also a popular music singer and does this take him out of the trad folk category?
Don't think so. A lot of early country folk musicians such as the Carter Family sold lots of recordings in their time.
So we have to expand the definition of folk music as again the prism.
This doesn't mean we have to exclude the traditional field recorded singers or players.
What this all means is that we have to open our ears and minds to include the idea that anything that appeals to a large population might be a form of folk music if it is accessible in terms of being able to be reproduced by easilly by real people.
In this way rock might well be folk. If enough kids can sit down and make music in different settings with the same songs that are recognizable and easilly played...well it's the "people's music".
We have to get used to the idea that not all folk music is really good. Some of it is doggerel...bowlderized to such a degree that it has become incomprehensible over time. Some of it may require too many footnotes to communicate.
One of the hallmarks is that it may not be confined to one way of doing it. Lyrics and tunes can grow, change through time by a communal process. This is one definition of folk which again is a way of looking at it.
It might defy copyright laws if it is to survive as folk over a long period of time.
It's the old "blind men and the elephant" game. It depends on which part of the anatomy we are "looking" at.
Dylan would have to be placed alongside of Woody since both derived their songwriting from traditional sources as did A.P. Carter or Leadbelly. Are they folk singers? Why not?
That said, many art and pop singers are out of the loop. They may have imitators but they are too sophisticated or highly specialized to be accessible to everyone who wants to perform their songs.
Folk=people. Songs that everyone can somehow participate in their recreation.
I think the part of folk music that I believe defines it is its accessibility.