If you just ask, "Do folk musicians ever play and sing hymns when they get together?" the answer is definitely yes. For example, "Let the Lower Lights be Burning" fits lots of folk topics & around here it used to be sung a lot. "The Fight is On"
(here) is such a great song that we used to ask for it frequently from a woman who knew it. She stopped singing it around our rowdier friends, though, because they insisted on singing it like a football song.... GOOD song though.

"Almighty Father, Strong to Save" and "The Seamen's Hymn" are sung often, in fact the Royal Mile Pub shanty sing closes with the Seamen's Hymn ("May the Lord put an end to these cruel old wars/ And bring peace and contentment to all our brave tars.")

People often sing "church" hymns at Gospel sings, too. Some seem to fit, others don't. "In the Garden" is popular, for example.

Rita