This all reminds me of David Hume's remark, on seeing two Edinburgh women in contention across the street from the windows of their respective tenements, that they would never agree, as they were arguing from different premises.

1954 definition? Yes, that's folk.
Bob Dylan? Yes, that too, and Woody Guthrie.
Cowboy yodelling? Yup.
Men in lederhosen and feathers in their hats slapping their thighs? Ja.
Fairport Convention? Well, they use folk, as do Vaughan Williams and Bartok.
Irish sessions? I think so.
Klezmer? Depends how it's done, there might be a clue here.
And lots more.

I think Sweeney's film clip was a bit of a case in point: clearly staged in a studio for the cameras, trying to show the form of English rapper dancing, not its original social context, a bit prissy by modern standards. The original dance probably survived quite a few social contexts.

So there are at least two sides to folk (probably six, otherwise it would't hold water)- the form of the music, and it's social context. Some musics, like the Irish session, have changed their social context radically in living memory, but so seamlessly that few noticed it. Apart from the instruments getting better (and more expensive), the music hasn't changed much.

I suspect that few Blues singers have experienced the chain gang (though some I've heard would certainly have been improved by it), but then relatively few ploughboys had spent seven long years carrying half a ring round the world, and only a few early 19th century Scottish grandmothers had experience of reiving. One of the things that makes it 'folk' is that it can adapt and appeal to new contexts- quite often evolving on the way, as from the high tragic ballad to the playground skipping song.

It's a spectrum, which gives hope to Over The Rainbow's chances of becoming Trad.