It would seem that it is a matter of interpretation. Some sensible councils, see it as participation. For others if two fiddles are playing badly, it is not entertainment. If three fiddles are playing badly, it is entertainment and then needs a licence?
The problem for publicans is that in order to obtain the licence, an inspection has to be made. This could involve expensive improvements. The irony being that on nights when there are no entertainments, the place could squeeze in as many folk as they want, without any inprovements, whether this was safe or not.
Not a very satisfactory state of afairs.......