@Baron Opal II - all I can say is that in my experience, claims of "open world sandboxes" mean that the characters have pretty much no connection to the setting and are largely blank pages because there's no point in having anything else. As you said, that first level character has "family members, a mentor and a childhood friend". So, yes, as you say, nothing in my character's backstory is going to matter, so why bother having one?
After all, the odds that any of those three things will come up in game, when the only time I can specify any of them is at chargen, is so close to zero that it might as well be zero. And then we have
@Helldritch flat out saying that any NPC the players attempt to add to the game come with built in chances of being a hinderance rather than something that adds to the game, well, again, what's the point? Why would I bother? There's no upside there. I'm far better off simply engaging with the DM's puzzle box because at least there I have control. If adding a NPC just places me in a worse position 1/3 of the time, randomly, then no, I'm never going to do it because it's a fools bet.
But, at the tend of the day,
@Baron Opal II, you absolutely are dictating to your players. They have zero control in your game other than what tiny little spotlight is shining around their characters. In order to got to the noble's party, they engaged with your puzzle box until you decided they succeeded and then they could go to the party. IOW, they have no actual control.
Control means that the player gets to tell the DM that X is true in the game. If the player cannot tell the DM that X is true in the game (obviously beyond simple actions by the character) then the player has no control over that game. Which is a perfectly fine way to play. Trad play generally follows this. But, it means that the player has zero incentive to take any ownership over the game and becomes a passive consumer of the game.
I don't want consumer players anymore. I want the game to be a collaborative effort. I want the players to tell ME that X is true and then I can incorporate that into the game, taking it in directions that I don't have control over. Fantastic.