There are a lot of traditional musical instruments being integrated into modern alternative music. Here is one example: https://youtu.be/v4xZUr0BEfE

This example is very important, and thank you for this distinguished interaction. It refers us to the following question: To what extent can traditional musical instruments be developed while preserving their identity?

I think the question of how and which traditional instruments can be used for contemporary music, really depends on the musician. Instruments like the lute, hurdy-gurdies,... have been used in metal as wel as contemporary classical music. Good examples in Belgium are Jozef Van Wissem and CHVE. To answer the question of how to preserve their identity, the first question should be what their identity exactly is. Does their identity lie in the specific use of the instruments, their physical form, the sound,...?

From a historical standpoint, the physical appearance of an instrument or the sound is not always clearly tied to their identity. Instruments developed and changed constantly, so the so called standardised appearance of a traditional instrument today is mostly nothing more than the last shape these instruments took. A similar thing happened with the sound of instruments. As technology advanced, instruments changed. For example in plucked and bowed instruments, the sound changed quite drastically with the invention of overspun strings.

So from the standpoint of a luthier, I would say that traditional musical instruments can be developed to be used in contemporary music. The development of them is in my opinion a more historical approach than to use copies of the traditional instruments we have left. Historically there would have been a co-operative effort to develop music and the instruments between composers, musicians and luthiers. By adapting traditional instruments for contemporary practices, this practice is kept alive.