How do we respond to those who divide innovation (bid‘ah) into good and bad, and use as evidence hadiths such as "Whoever introduces a good practice (sunnah hasanah) will have its reward and the reward of whoever acts upon it," and "What the Muslims deem good is good in the sight of Allah"?

In Islamic law, there is no such thing as a "good innovation" (bid'ah hasanah). As for a "good practice" (sunnah (definition) hasanah), it is that which conforms to Islamic law and encompasses several things: 1. When a person initiates an action that has not been done before, based on an Islamic legal proof, such as the hadith (definition) of Jarir ibn Abdullah in Sahih (definition) Muslim, where a man initiated giving charity with a purse of silver, and it became a good practice. 2. A practice that people had abandoned, and then someone revived it by acting upon it. 3. A person doing something as a means to a permissible end, such as building schools and printing books. Such actions fall under the saying of the Prophet, peace and blessings be upon him: "Whoever initiates a good practice in Islam will have its reward and the reward of whoever acts upon it."

As for the saying, "What the Muslims deem good is good in the sight of Allah," it is a statement by Abdullah ibn Mas'ud, and scholars use it as evidence in the chapter of consensus (ijma'), not for endorsing innovations.