Why is a variation "correct" or "incorrect"? Nothing about that in the 1954 definition, or your Funk and Wagnalls!

That's the root of the misunderstanding. Horse definitioners (etc)are always assuming that users of the classic definitions are disapproving of music that is not, by those definitions, folk music. IMHO that is absolutely not the case.

Wheter it is "folk" or not is nothing to do with whether it is good or not. There is some good in most styles and a lot of dreck in all of them too - but at least folk music (stricto sensu) has demonstrated that it can survive.