Farmer Giles of Ham: Comedy in Faërie?

Tolkien suggests in "On Fairy-Stories" that the magic of the world of Faërie must not be mocked, even if comic elements are present in the story:

Faerie itself may perhaps most nearly be translated by Magic - but it is magic of a peculiar mood and power, at the furthest pole from the vulgar devices of the laborious, scientific, magician.  There is one proviso: if there is any satire present in the tale, one thing must not be made fun of, the magic itself.  That must in that story be taken seriously neither laughed at nor explained away.

In part, he believes this is so because true Faërie requires readers who desire the magic of its world and believe, which is not the same as a suspension of disbelief. The world must, indeed, be desirable for it to work its charm. Farmer Giles of Ham, while it originated in the 1920's as a tale for Tolkien's children, much like Roverrandom or Mr. Bliss,  was expanded by 1938 into a tale that clearly included mock elements which a learned society, such as the Lovelace Society, could appreciate. And by its publication in 1949, it had acquired the mock-scholarly forward and the delightful comic illustrations by Pauline Baynes. It had clearly become a tale appreciated best on a number of levels. The Russian literary theorist Mikhail M. Bakhtin has observed that mock-genres tend to bring a realistic corrective to the more idealistic works they parody. Mock genres reduce the hallowed distance that a work like an epic, tragedy, or grand romance introduce to hold readers in its power. Instead, their laughter brings the foibles of life up-close for examination:

As a distanced image a subject cannot be comical; to be made comical, it must be brought close. Everything that makes us laugh is close at hand, all comical creativity works in a zone of maximal proximity. Laughter has the remarkable power of making an object up close, of drawing it into a zone of crude contact where one can finger it familiarly on all sides, turn it upside down, inside out, peer at it from above and below, break open its external shell, look at its center, doubt it, take it apart, dismember it, lay it bare and expose it, examine it freely and experiment with it. . . . Parodic-travestying literature introduces the permanent corrective of laughter, of a critique on the one-sided seriousness of the lofty direct word, the corrective of reality that is always richer, more fundamental and most importantly too contradictory and heteroglot to be fit into a high and straightforward genre.

In other words, parodies, mock-genres, force us to see the complex, contradictory nature of life as it is really lived. The literary world that is Farmer Giles is not the same as most of Tolkien's literary fiction. It is a medieval world set somewhere in 9th-century England, though one not easily identified on any map. It is not the Middle-Earth of The Silmarillion, The Hobbit, or LOR. What then, if any, is relationship of these two fictional worlds?