I agree with that entirely too, Nick.

These arguments are always about where the line is drawn and always subjective. Subjective involves a matter of opinion and differing ones will never be agreed on. There always has been and always will be good songs to sing in folk clubs that will be disputed.

Harry Robertson's Penguin Eggs
Ralph McTell's Streets of London
Eric Bogle's The band played Waltzing Matilda
And, of course, Ewan MacColl's Dirty old town

Are all fine examples of non-traditional songs that sit well in any folk club.

Bellowhead's Byker Hill and Thousands or more are far more traditional songs but can we envisage an eleven piece band complete with brass section at the local folk club?

Just arguing about where the line should be gets us nowhere and certainly doesn't help the OP learn anything but how difficult it can be to please some!