Nonsense - we have no idea what the 'folk' called what we (or some of us) refer to as folksong because, with a few honourable exceptions, nobody really bothered to ask them.

The whole concept of FOLK is a construct of a Victorian Paternalism that really believed God did make them high & lowly and order their estate.

Whatever they called them, most source singers, when questioned, differentiated between their 'folk' songs and the rest of their repertoire

Traditional Singers were canny enough to compliant to the wishes of their betters, but that's no surprise. It's a Bill & Ted situation. Such deference has been endemic since Fuedal times.

I'm sure Mozart or Haydn or Beethoven never called their music 'classical' but most people understand the word when it is mentioned

Not sure about that, but most musicians call their music something as part of their comminity & tradition. Folkies, for instance call their music Folk, which is exactly what it is, no problems there. I only get flustered when they call other people's music Folk too. A 60-something Social Worker getting up to sing Brigg Fair in her local folk club is very much Folk; Joseph Taylor singing the same song for Percy Grainger's wax cylinder in 1905 is something Very Different Indeed.

It pays, I think, to be clear about not so much what Folk is, but what it isn't.