It's mainly a matter of who the audience is. In an Irish session, for example, the audience is mainly the other musicians- perhaps even a subset of them. In an English folk singaround, the audience is the other singers. If other people are present, they are usually there by choice, and know the musical framework. Unless it's one of those awful pubs where there's no separate space and the general punters resent the folkies because they'd rather watch Sky or play the jukebox/ fruit machine.

I generally find open mike and "acoustic" sessions unsatisfying for that reason: the punters are there to be entertained on their own terms. In other words, they want blues, country, pop nostalgia and easy listening. They don't want traditional stuff, it doesn't sound like the radio and they aren't familiar with it. All credit to those musicians who are happy to do that stuff, but don't ask me along.

If your main aim is to please the punters, don't do folk. You might slip a bit of Richard Thomson past them, because it sounds more like the stuff they want. But they'd have chucked Margaret Barry or Willie Clancy out.