Definitions are needed by lawyers and scientists. They require an impersonal objective boundary to be drawn.
The 1954 definition is based on Process- how the pieces came to be.
However, most people recognise musical genres by that elusive quality, style.
The Cheese analogy has come up a few times earlier. Define Cheese by process- milk treated by biological means, and you will get some odd results. Yoghurt must therefore be cheese- yet it is not seen to be. Fromage Frais, the same applies-though we won't even translate it, in case it is mistaken for cheese. Non-dairy cheese, made from beans, is cheese, or at least cheese substitute, though it lies outside the definition. I'd suggest that most people decide whether or not a substance is cheese by taste and functional value as a foodstuff.
Just as with Folk music. How often have we read, "I know it when I hear it"? Outside Legal or scientific fields, we recognise the style, so a composed song that sounds like a folk song, e.g "Fiddlers Green" is seen as a folk song.
The problem is that style is not a black and white issue. There is a continuum, from 100% authentic folk to "somewhat influenced".
It is not sensible to attempt to draw a line, because there are going to be rational arguments between those who believe that a musical genre is inclusive and those who believe that it is exclusive.
This applies to discussions- which can be equally virulent- about Folk, Jazz, Country, and countless Electronic Dance Music genres.
I don't go along with the argument that we need rock solid definitions for discussion- it is perfectly normal human behaviour for quite long discussions to take place where people disagree wildly about the definition of the topic under consideration. (see above)
Cheers
Dave
p.s.
I'm right and everybody who disagrees is wrong, of course- but that's what they all say!