I believe that Ewan and whoever he assigned his royalties too has made a good amount of money from the recordings of Lauryn Hill and Roberta Flack, among many others. He is certainly credited as the composer on the recordings, so I do not understand how the idea that he was being ripped off by more commercially-oriented artists comes into play here. Woody Guthrie once said that anyone caught singing a song that he wrote was surely a good friend of his because that is what he wrote it for. I expect that Ewan felt the same way.
As far as I can tell, neither Roberta Flack nor Lauryn Hill should be labeled as grossly commercial pop acts. Judging from their records they both seem to be at least as concerned with their art and their politics as they are with producing top selling records. Roberta Flack has always presented herself as a jazz singer. Lauryn Hill and the Fugees have always featured politics and an innovative musical approach to hip-hop. We are not talking about the Monkees here!
As to the question of whether "The First Time Ever I Saw Your Face" is a folksong, it all depends upon your definition. It certainly is not a traditional song. Nor is it especially traditional in the nature of its lyric (which is essentially a poetic lyric more akin to poetry with known authors than to traditional song) or in its melody (which is quite sophisticated). It is true that Ewan was generally said to be a folksinger, but he was clearly much more than that.
The pages of Sing Out! have been filled for years with debate over what constitutes a folksong. The subject makes for interesting reading. Mostly, however, the definition boils down to whatever each person who believes him or herself to be an authority on the subject says that it is. I expect the same is true for soul music. If the people who consider themselves to be authorities on soul music, or the people who like soul music, consider "The First Time . . ." to be soul music, then I suppose it is. I doubt that Ewan would have minded.