I think it is excellent to provide this zone. Lots of people are interested in making their own music and in taking such opportunities to share that experience. This is a salient aspect of 'folk music'. Zone participants, if they don't already, may realise by such events that they are part of a great big unpredictable exciting continuum - a (dare I say it) tradition.
You can't expect people to appreciate the real nature of folk or traditional music/song if you say 'well, in folk clubs it's OK to sing a 19th century incest ballad or a 1970s revival song but it's not OK to express your own experience of life now'.
In the end only the best songs endure, so I think it's counterproductive to say EFDSS can only be allowed to do/show/support 'old' stuff. The old stuff is, after all, the wheat remaining from the chaff at any given time.
'Now' is at least as important as 'the past' in the continuity of any art form or community activity.