Jazz lover embracing naked entertainment (7)
I believe the answer is:
cabaret
'entertainment' is the definition.
(cabaret is a kind of entertainment)
'jazz lover embracing naked' is the wordplay.
'jazz lover' becomes 'cat' (I've seen this in another clue).
'embracing' is an insertion indicator.
'naked' becomes 'bare' (synonyms).
'cat' enclosing 'bare' is 'CABARET'.
(Other definitions for cabaret that I've seen before include "Film set in 1931 Berlin - floor show" , "Bear cat (anag.)" , "Nightclub 12ac" , "Bob Fosse musical with Liza Minnelli" , "Floor show for Arab etc" .)