There is a trivial system that answers this (a) while avoiding alienation for a player around the inner workings of their character's accumulated knowledge and while (b) still maintaining challenge-based priorities. So lets go with that exact exchange between GM and player with the player stipulating "I know there's a settlement of giants in the hills to the east."
GM: That sounds like you're consulting your accumulated knowledge on giant settlements? Cool. Also, there being a settlement of giants in the hills to the east only sounds interesting. It's still on you to endure the perilous journey there and brave the giants to actually make that info useful. So roll +Int and on a 7-9 your memory is fully intact and correct, but it is on you to make that useful and actionable. On a 10+, I'll give you something else about that settlement to make that lore useful and immediately actionable. On a 6-, your memory is somewhat intact, but faulty in a bad way.
Player: <Rolls +Int> 6! Crap!
GM: Alright, mark xp. So yeah...there is a settlement of giants in the hills to the east. That much of your recollection is true. But recall The Tale of Winter's Ill March. The tribe endured a terrible famine centuries ago which led to a fell spirit tempting some of their numbers into cannibalism of their fallen. Now cursed, every winter when forage and game in those east hills falter, the descendants of those cursed go mad and a purge begins...as insatiable hunger causes them to give chase of their non-cursed kin westward down the escarpment...toward here...your village.
Hunters of the east hills returned this morning with a grave declaration...neither fish nor fowl nor belly-filling beast of any kind could be found...
The player retains ownership of the inner workings of their character, in this case their memories and accumulated knowledge, and doesn't feel alienated from a setting that should be lived-in for them.
The player has significant agency to drive the gamestate forward in a desirable, interesting way, but that agency isn't remotely unchecked or without risk.
The situation-state of play moves forward in an exciting, dangerous, dynamic way.
Easy peasey lemon squeezy.