Greg, at a broad level you're right of course. Nevertheless I cannot help but feel that there's a difference in approach between the composers and folk performers. Which is not to say that one side is any more respectful of the tradition than the other, simply that they are trying to do different things with the music. Which is why, to answer the OP, the composers' works aren't generally performed at folk clubs or festivals.

The differences in performance styles are I think due to the different cultures and attitudes of the classical and folk worlds. There is nothing to prevent Bellowhead from publishing their arrangements and from someone else forming a similar ensemble and performing them - it's just that such behaviour isn't expected (or respected) in the folk world. There are certainly enough examples of people seeking tablature for Nic Jones' or Martin Carthy's guitar arrangements to show that it nevertheless goes on.