As Marje has pointed out, there's no catch-all rule which governs this--except common sense and courtesy.

I'd certainly agree that in the US the general feeling is to encourage, not discourage, community singing.   Of course we do want to avoid falling into the dread Blue Book syndrome ("Rise Up Singing"), in which every listener insists on singing every word out of the same book as the leader. To try to strike a balance, many of us just tell the others in the room what we intend. I try to pick almost entirely songs with good choruses, which I expect and invite the audience to sing. I do not expect and invite the audience to sing the verses. I think that is reasonable. If they do, I live with it, and don't complain. But for me, neither the "Blue Book" approach nor the book itself is acceptable. Of course we've beaten that issue to death already on Mudcat.

But, as Jacqui has noted, there is a strong desire to sing on a song you know.   I figure singing on the chorus should satisfy this. (That's all I expect to be able to do as a listener.) Or on a ballad, the audience will sing on the refrain.   If there is no chorus or refrain you are living dangerously--unless the audience knows this in advance, you are advised to not sing two songs of this sort in a row. The group will sing if given a chance, and unless you tell them in advance not to, it is eminently reasonable they would do so.

It is in fact up to the performer to set the guidelines out in advance--or not complain when the result is not to his or her liking.   At FSGW events even the paid performers know this, and often invite us to sing along.   Even if they don't, we will sing the chorus, and probably harmonize. As Mick has pointed out, our contributions are often very appreciated., since we do know how harmony works.   I sometimes think we latch on to the simplest harmony too fast--and it's not always the best.   But you can't fight it.

Part of the reason we sing so much at concerts is that it is self-selection---that is in fact one of the main reasons some of us come to concerts.   If we were discouraged from singing, some might well not attend. And there are often people in the audience who have been on CD's, have their own groups, etc. And love to blend with other voices.

Another element might be that this area (DC area) is a hotbed of singing. I could name 5 excellent 150 voice-plus choruses.   Lots of bluegrass. Sea chantey groups. Balkan. Sacred Harp.   All sorts of duos, trios etc. A lot of us are passionate about singing.