I'm not entirely convinced about the difference between plagiarism and the folk process being whether the change is deliberate and conscious or unconscious. I'm not even convinced that there was/is much difference at all in the absence of copyright law. Shakespeare took many (most? all?) of his plots from existing literature. His work is respected because he picked stories that were good ones and because he told them very well.

The evolution (yes, I do think it's a perfectly appropriate term) of Barbara Allen into umpteen versions surely involved many instances of broadside writers or printers making changes (deliberately for good or bad reasons or inadvertently) and many instances of singers misremembering, misunderstanding or deliberately making changes that they regarded as improvements.

I do think that inadvertent changes tend to be for the worse and deliberate ones for the better, but those are merely tendencies and there are plenty of exceptions.

And the making of new versions has not stopped. In recent times participants in the folk song revival have quite deliberately made completely new versions of some of the classic ballads; e.g. Leslie Haworth's rewrite of The Frog and the Mouse, Bob Coltman's "Son of Child" series and Brian Peters' version of Our Goodman.