Interesting set-up. You did imply that you would be going back there. So that probably say's a lot. As you said the audience liked what you did, so I would advise you not to change your approach at all. Next time you go, you may find that you have even set a precedent and that all the other performers will now ask them not to play?
At these informal things, to me it is not really too important how much someone plays as much as what, how and whether it is adding or detracting from the performance. Sounds like he was maybe one of those exceptional players, who I have been lucky to find, very occasionally, that can add to the music on first hearing? There certainly are other lesser talents, who would not have added much, but would have played all night anyway.
If you look at the principle of the thing, as opposed to judging the aesthetic nature of the resulting music, it would not be too much to expect him/them to ask if it was OK with you. The other folk performing probably knew what to expect and went there with that understanding. As you say, you did not know what to expect, so the onus was probably up to them to explain to you. However they did stop when you made it clear you did not want them to play.
I suppose I have some sympathy with them as when I have gone to the trouble of packing my instruments, going out, travelling to the place, tuned-up and unpacked them, I kind of like to play as much as I can. For the one thing that musicians do just as well as make music, if not better, is to 'natter'.
I can 'natter' too and there is a time and a place for that, but sitting there with all those musicians and all those instruments and to be surrounded by absolutely no music at all, is like a bad dream to me.
But just to actively listen to others playing, is good too.