[No intention in my reply to try and define folk music...]

Depends on your point of view and your musical tastes, Conrad. I know what you mean but you'll never stop musicians experimenting musically - never. Whether such experiments work or not depends on the taste of the individual - beauty is in the ears of the listener, after all.

As for "fusion", well... I recall Davy Graham's guitar accompaniment to Shirley Collins's voice on the "Folk Roots, New Routes" album of over 40 years ago. It sounded wonderful to me then and sounds wonderful to me now - the blending of jazzy/bluesy/far-Eastern sounds with traditionally sung folk songs worked beautifully. My taste, of course - perhaps not yours.

If you have any creativity within you as a musician, then experimentation will happen. Happens all the time in the jazz world and always has done. Why should any other musical form be totally immune? Think of Jan Garbarek and the Hilliard Ensemble with "Officium"...