We all have to learn songs from somewhere or someone, whether it's from the printed page, a recording, or hearing a live rendition by another singer. I've learnt songs from all these types of source. I don't see anything to be ashamed of. Does it matter if the young woman in question learnt the song from a record of Martin Carthy's, or was personally taught it by Harry Cox? Sure, the latter would probably be better, but we don't all have the luxury of being able to get things from the horse's mouth, and sometimes have to make do with a 'second-hand' source.

IMO the young woman's only 'crime' is ignorance or lack of research. I don't know when the incident Jim mentions happened, but if it was years ago it would not have been so easy as it is today (with the Internet, DT etc.) to check the source of songs. I sang some songs for years before discovering the true source. I would just say "I don't know who wrote this song, but I heard it sung by Joe Bloggs - if anyone knows the writer, please tell me" or whatever. Then eventually I found out more about the song and was able to say more about its provenance.