Yes. I can name a folk club that asked for auditions. I can name two, and there may have been more. THe Mucky Duck - Chester - late 60s early 70s. Its ads said ring for a floor spot. I did. They asked me to audition and said it was policy. Second, that place slightly north of London (plainly not a "folk club") that the Villan runs and Breezy attends glories in selecting floor singers.

Likewise, GUEST (why are they always in capitals?) since "folk" has the 1954 definition, although both Fairport and Steeleye used amplifiers and altered arrangements, and wrote contemporary songs, they were also "folk" performers by definition.