Reynard, do you not see a disconnect between claiming milestone levelling in sandboxes is bad because it leads PCs... while at the same time acknowledging that DMs lead PCs in sandboxes with questions, location rumors and other rewards like treasure?
I think I understand. We appear to be using similar language but mean different things. Since I do not want to put words in your mouth, I will define how I am using terminology and perhaps it will clear up some miscommunication:
When I say "milestone leveling" I am not talking about an XP reward. I am talking about when the module or GM says you level when you do a specific thing ("When the characters defeat Lieutenant Mook in battle, they advance to 3rd level.") or when a certain amount of time goes by ("every 3 sessions") or in the case of Rime of the Frostmaiden, a sort of combination ("When the characters complete 2 side quests.")
A sand box is what in computer games are called an "open world." The degree to which the locations, NPCs, events, etc... in the open world are defined prior to the PCs' involvement is not necessarily central to that definition. A sandbox con be a completely random hexcrawl that is procedurally generated during play, or a tightly designed adventure area where everything is specifically crafted. Nor does the density of its features define it, one way or the other. Likewise, whether the sandbox is created by the GM, bought from the store, or any point on the continuum between the two is irrelevant. What makes it a sandbox is that the PCs are free to go wherever they want and do whatever they want, whenever they want.
This does not mean there is no content or that the GM does not present potential quests through anything from bulletin boards to NPCs asking for help to sudden and dramatic events. What there is not is a singularly defined "plot" -- although individual side quests may well have a built in story -- or predefined path (physical, temporal, or otherwise). And because there is no path, there can be no milestones.
Therefore, it is my opinion that it is necessary to award XP for engaging in the open world, with those awards commensurate with the risk and/or difficulty of the element in question, and that the players alone are responsible for making the choices of what elements to engage with.