Here's how I think about and talk about agency. Not only when it comes to games, but also in regards to real life.
It's almost always in regards to a particular objectivity. The agency required to achieve political change or agency over my personal earnings. I think agency requires autonomy, power, and information. You need all three in some amount to have any, but can have more or less overall agency depending on the amount of each you have. You need the autonomy to move freely and choose both your ends and your means. You also need the power to bring about change in your environment. Finally you need information so you can make informed choices about how to leverage your power.
In an old school sandbox like Moldvay you start with almost unlimited autonomy. You can pretty much go anywhere and do anything. What you have very little of is power and information. The entire point of the game is to utilize your autonomy in order to gain more power and information so you can have meaningful agency to achieve your goals. In the real world power often comes with less autonomy, but games are not life so as you progress in level you mostly become more powerful and gather more information while retaining your autonomy. It takes skilled play to gain agency.
I will admit that in most of the character focused games I run players generally have less autonomy, but far more power than starting D&D character (and generally a lot more social influence than most D&D characters of any level) and a lot more access to information to make informed decisions. Like a common fictional conceit is that players might play generals, merchants, etc. People that are connected, but have less freedom of movement. Also characters tend to lives with responsibilities they must juggle against their aims. Agency is not something you are expected to earn in the same way. You can gain more through good play, but not much.
While these contrasts all generally apply to the shape of the fiction I'm talking mostly about players here. So like in an old school sandbox information is centered around the player pretty often like knowledge of monsters, traps, etc. In Apocalypse World we use a lot of telegraphing before we punch the player in the metaphorical face.
A good analysis, as far as it goes....
The point of rules being ot limit options sufficiently to enable meaningful interactions. Excess agency doesn't lead to more play, but to a lack of direction to move in. The point of session 0 is likewise to set limits on story so as to productively produce interesting-to-the-players situations.
One of the things covered in an MAEd program is how to elicit maximum creativity from children - and it is proven that maximum creativity is attained with clear directives and a framework to work within. So, not, "how was your summer?" but, "What cool thing did you do this summer?" The first gets 1-liners. The second gets kidergardeners trying to write essays... in stickfigure drawings, with the few words they can spell...
RPGs are much the same... a framework makes creativity easier.
For some, the level of maximum creativity is more constrained, and they need a clear combination of rules and setting to be comfortable being creative - sometimes down to the level of minis wargame with connections. For others, it's just a casual agreement to genre and trusting others to not overwrite one's contributions, with a provision controlling who gets to narrate when.
Agency without framework lacks meaning. Framework without agency is literature, theater, movies, television...
An interesting literary corpus has a character that, if played in a game, would have
too much agency - Q only works because the medium has no true agency, and the authors have chosen to limit the characters choices by Q's warped morality - Q isn't lacking in a moral code - he's clearly got one, and it's the only thing that keeps him testing humanity. We know Q is one of at least 5 Q in the continuum... the level of agency each would have is comparable to a GM's... and 4 GM's with no limits is almost unplayable.
A party of 4 members of the Q continuum are limited only in their morality and the Continuum's ethical standards. (Noting that Q {DeLancie} is clearly borderline on continuum ethics... as we see in several episodes. Q{Bernsen} points this out explicitly in one episode.)
The highest level of agency I've encountered in play is not quite Q-level - Wick's HotBlooded engine, in the form of
Blood and Honor, which is samurai. It sets just enough framework to enable story control to be meaningful...
Story requires conflict - many stories are conflict in the form of combat. It's an easy method - one that is also mechanically interesting in most rulesets.
Too much agency makes conflict meaningless, because one can just narrate it away with a handwave if one has sufficient allowed agency.
So,
Agency isn't the ultimate parameter: it has to be a resource used in appropriate levels. It's part of a package that makes the game.