In my view what is/isn't acceptable depends upon the setting. On one hand singing in bars/pubs where the public are free to come and go and at a lot of socials where the music is largely 'wallpaper' it is up to the performer to earn the attention of the audience.

In a club then it is nice to have mutual respect between performers who should know better; folk clubs do have two purposes - one to perform folk song/music and/or see it performed but also as a social gathering where one meets up with friends. However, it is good manners to to keep any conversations down to a reasonable level, at the back of the room - not just for the performer, but also for the audience members who rather listen to the performers than other peoples conversations/mobile phones, etc.

In a concert venue, then everyone should display the same manners as would a theatre or opera audience, especially if the tickets are expensive.