“but how will people know it is a folktale if i don't situate it in the context of some fake imagined lore-sharing” idk have you tried switching up your authorial voice
if you aren't asking yourself the question “why is this story being told” throughout the entire process of putting together your folktale you are failing; it's not as simple as coming up with a cool story and sticking a folkloric wrapper on it
folktales can be cool stories!! but they're never JUST that; they're always informed by the agendas of the people telling the tale
@Lady this makes me think of that tumblr post where someone asks "what is [thing]" and the responder goes through half a dozen aborted attempts to explain as they realize they need to explain more historical concepts until they get to something like "about ten thousand years ago people realized they could plant their own crops..."
it just makes it feel childish to me like you can't trust the audience to figure out that this is a story without slamming them over the head with it at the beginning and end