But "Living World" entirely offscreen and more likely to not see play than to see play becomes "Setting Solitaire." Its there for the GM only (some form of exclusive self-immersion or cognitively scratch your "Sim Setting" itch). There is no reason for the GM to not retain the initial conditions (Tier and orientation/status) of any Faction/Setting situation for when their number is dialed up and they go from offscreen to onscreen (if they/it ever will).
Yeah. I saw the questions you posed, but I'm going to respond to this--and maybe that'll answer them indirectly.
I do the setting stuff because I enjoy it, yes--in addition to the fact that the tables I'm DMing are playing 5E which at least mostly assigns that to the DM (if you're not running published adventures, which I dislike intensely and an incapable of running well). All of that aside from my bad experiences with more-collaborative world-building--which, while they've shaped my preferences are not proof of anything other than that approach doesn't work for me.
If I've prepped stuff in a place, and the PCs go there, I'll use it more or less as it's written. If they go somewhere else first, there's a good chance they'll need (both dramatically and ... I dunno, not? other needs they might have?) different things than I originally prepared. So, I'll prepare different things--which might be evolutions of what I have, because they're a starting point; or they might not.
If it's a place the PCs are going back to, I am--again--almost certainly going to prep changes to that place. Part of that is that places don't stay the same (so, verisimilitude, I guess) and part of that is that--again--the PCs will have different needs than they had before.
It doesn't feel from inside my head as though I'm changing things around in the setting just to do it, or to have things happen offscreen, or to scratch any itch I have. I do, sometimes, have ideas that get ... parked, I guess, and when I deploy setting stuff (either writing stuff from scratch or changing it) there is some amount of making sure it fits with what has gone before.