It seems to me that there are two ways of looking at the concept of definition.
I shall try to put this in value-neutral terms, so I'll stress that none of the classifications I use are intended to be insults, or compliments.

To some of the posters on here, a definition is handed down from an authoritative source, and should be respected because the the authority of the source is respectable.
With no derogatory implication, this approach can be described as authoritarian.

The underlying argument of Sinister Supporter's proposition is that definitions are a result of consensus. Thus a song sung in a context in which the performer believes is Folk is folk to that performer. Similarly, if I hear "English Country Garden" and think it's a folksong, (although deluded) I am, in my own opinion, attending a folk event.
The definition is democratic.

Now the big problem between the viewpoints comes from the use of the word "designated".
The authoritarians immediately assume that there must be an official designator to make the decision. The democratic advocates leave everyone to their own individual devices to designate the event folk or not.

Either view seems perverse to the holders of the other.
You are never going to agree, so shall we just sing a few songs now, hey?
Cheers
Dave