A group that comes strongly to mind in this discussion, more so than S Lakeman, is the Penguin Cafe Orchestra. They had very poweful folk elements, much more so than Lakeman I would have thought, but they were not generally classified as folk, for reasons best known to festival organisers and the press. Loads of folkie musicians play the PCO's "Music for a found harmonium", for example, and the tune is quite clearly a very traditional style reel, somewhat modernised and quirked up a bit. Yet that is generally kept out of the "folk" camp, even by the "inclusive" brigade, whereas Lakeman isn't.
All of which, of course, has b*gger all to do with whether they are good or not, competent or not, popular or not, or whether you like them or not. But nobody spits fire if someone says the PCO aren't folk, do they? Whereas the reaction to someone saying the same about Lakeman is an instant splutter of "exclusive", "folk police", "Aran Sweater", "self-appointed gatekeeper", "letting our music down", "beard", "semantic based smug-arsedness" etc. Are we all being stirred up by some clever trolls? The logic has always defeated me.