All musics operate with respect of community, tradition and process - all musics are, therefore, traditional - but not necessarily folk, which isn't really what this thread is about. I'd have a look at the ICTM if I were you; they were formerly the IFMC who came up with 1954 Definition in the first place. It's got nothing to do with dilution - on the contrary, it is taking a serious look at ethnomusicology.