I'm still not sure I understand your definition of "illusionism," so please enlighten me if I'm not getting it.
Illusionism is when the DM makes something seem to happen that didn't.
Some examples:
1) You come to a fork in the road, but the sign has fallen on the ground. One way leads to the magical city, the other to the crypt of insanity. The players choose left and go to the magical city, not because it was on the left, but because the DM has determined that the first fork taken always leads to the magical city.
2) You are in a fight with the BBEG. Things seem desparate. You are maybe a mere round from a TPK, when the one character with a good action scores a critical hit! Everyone cheers, and the DM says, "You did it. The BBEG slumps to the ground!" The table goes crazy! Only the DM knows that the BBEG still had 10 hit points remaining when he died.
3) You are in a murder mystery. You suddenly realize the significance of an important clue - the Grand Vizor did it! You chase the fiend to his secret laboratory, which turns out to be a fully outfited necromancer's lab complete with flesh golem. In a grand fight, you dispatch the evil doer. Only the DM knows that originally, the Grand Vizor was an innocent alchemist seeking after the philosopher's stone and the Queen Regent was the evil necromancer. But the DM switched because he didn't want to dash the player's feeling of triumph.
4) You are fleeing from a collapsing tomb, jumping obstacles and dodging traps. You dive out of the entrance at the last second just as a great stone slab seals the tomb forever. The DM secretly delayed the collapse by two rounds to make up for your dithering because he didn't want to cause a TPK.
If that's correct, I don't think you're fairly characterizing Fifth Element's approach -- picking up good ideas from players and running with them doesn't involve predetermining anything; the determination starts from the player's idea and goes from there.
Doesn't matter where the idea comes from. If you are secretly retconning your intentions to enhance the story, you are engaged in illusionism. The trouble with illusionism is that its alot like winning a game when you are a kid and then discovering that the person you played the game with let you win. Some players are ok with that. They will willingly participate in illusionism and will themselves to overlook it even when they suspect it is going on. But alot of players do not want to ever believe, suspect, or find out that illusionism is going on.
You seem to be suggesting that all approaches short of the "full sandbox" are bad because they involve "illusionism" somehow, and I don't think that's true. Each approach involves meaningful player choice on some level -- the only difference is where the out-of-bounds lines are.
Illusionism of any sort tends to make player choice meaningless in the long run. Even when the player retains some degree of agency, that is, you are using the player's idea, when you engage in illusionism you've pretty much decided the outcome of the story for the player. The player loses the oppurtunity to fail, which means that they've also lost the oppurtunity to succeed.
Now, I'm not saying that illusionism is all bad, which might be your problem. I think The Shaman is making choices to run a game with as little illusion as possible. But certain kinds of scenarios are hard to run without some degree of illusionism, and a small amount of illusionism can provide alot of structure to a sandbox without significantly harming player agency (provided its being provided in fistfulls elsewhere). At some level, almost every game involves some measure of illusionism. In an adventure path, the GM tries to give the impression that the odds are always wildly stacked against the players, but in fact, the odds are usually really stacked heavily in the players favor so that success is the expected outcome. In a sandbox, the GM tries to give the impression of a 'real world', but at the same time the PC's end up with the oppurtunity to live really interesting lives that in the real world 99.99% of all people don't have. In other words, even the most grim and gritty sandboxes are almost always places to play, not places to work and perform monotonous repetitive tasks as they realisticly ought to be.