"apparently never sung them in folk clubs (debatable)"
Debate away - lots of the older generation of singers sang music hall songs, Fred Jordan springs to mind - no information on what they called them - have you?
The 'folk process' continues,"
Repeating this as often as you like doesn't make it in any way a fact until you produce evidence that it is happening.
Writing new songs is certainly still happening - to become folk songs they have to be claimed by 'the folk' and not the folkie greenhouse horticulturalists (c) - (just copyrighted this term - please don't use it without paying the P.R.S. boyos!)
"can ONLY be a folk song if it was the subject of oral transmission is an outdated romantic notion"
You are on your own on this one - it has long been acknowledge that this is not the case and you are the only one I have heard to suggest it in a long time.
"the folk process has largely stopped."
Yes it has, that's why folk songs are no longer being made - the machinery went bust.
Jim Carroll