Im of the opinion that you can prep as much as you like, if the resulting play and procedures are conducive to allowing that prep to emerge organically.
This is another GDC talk I think is relevant here:
Essentially, what matters is volition, which is the capability to make choices, regardless of how much "freedom" there is.
Which, in turn, means that having pre-written content is not actually restrictive, so long as player volition is maintained. If you've prepped an entire region down to the gravel, that is a-okay, so long as how you're running it is allowing the players to engage with it on their terms, and that the choices they make matter.
3 Highly consequential and meaningful choices to make are better than a billion meaningless ones, but you're really not limited in how many qualitative meaningful choices you can present.
You're only limited by your own imagination and writing prowess, as well of course by your skill as a GM. A game thats well designed can in fact help alleviate some of the burden there, and ideally, will make it so that the GM only really needs to worry about making that content, rather than having to also worry about how to run it all properly.