To me, it all seems very simple.

On the one hand, there is Folk Music.

And on the other hand, there is Show Business.

If someone is paid for playing or singing, and somebody else pays to hear them, then IMHO that is show business. It matters not a jot whether the song/music being performed is a classical opus, a jazz standard, or a pop song. Nor whether it was composed today, yesterday, or several centuries ago. If a commercial transaction is involved, then it's show business.

This rule applies even if the songs being sung are 100% traditional. Even if the singer is a horny-handed son of the soil with leather thongs tied around his trouser-knees - even then, if money changes hands, then it's still show business in my reckoning. (And the fundamental principle of show business still applies - give your audience something they like, or go hungry.)

Contrariwise, folk music and song happen when people are playing and singing simply to entertain themselves, their families, friends and neighbours, plus any casual passers-by who happen to show an interest. If no money changes hands (the occasional free drink for the singer/musician is a goodwill gesture, not a contractual fee), then it matters not a jot where the songs and tunes come from, or in what style they are delivered. On that occasion, and in that context, they become temporarily co-opted into the folk tradition.

And the fundamental principle of folk music is - do whatever you do from the heart, and do it to the best of your ability. Those who don't enjoy the result are free to do something different when their turn comes around. Or they can simply walk away, and start another session or singaround somewhere else.

And whether or not horses can sing has nothing whatever to do with it.

Wassail!