I think it depends upon whether one is using a default or otherwise published setting or doing a homebrew. Generally, the only time that I use an existing setting is if I am running a superhero campaign set in the Marvel or DC universe (in which case, I determine the era which will be between the 70s' to late 80's) or another media property/universe like Angel/Buffy, Firefly, Ghostbusters.It's certainly not impossible, although I feel this sort of thing gets into diminishing returns fairly quickly and (IMO) matters less than a lot of folks might think. To take Traveller as an example, you could set a sandbox game somewhere in the Third Imperium or generate a sandbox using the process described in How to make a Traveller Sandbox and the players' experience would likely not be materially different.
Taken to extremes, it also tends to act as an attractive nuisance as this sort of setting canon serves better as a topic for pedantic old grogs to witter about online than as material that informs actual campaign play. Several major franchises (Traveller, Glorantha and Tekumel come to mind) have actually gotten a bad reputation on the interwebs as being hostile to new players because of this essentially useless lore and the intimidating antics of the old grogs arguing about it online. I've seen multiple instances of folks posting about wanting to get into a game but being intimidated by these people.
That's not to say it's all useless, but - to take another example from Traveller - CT Supplement 7 (Traders and Gunboats) is a far more useful than Supplement 9 (Fighting Ships). S7 covers a handful of designs that are on a scale relevant to a party of adventurers, and gives background aimed at helping a DM to use them in a game, including deck plans. S9 has a series of one page vignettes on a couple of dozen mostly large capital ships that are way too big to use in most games. It doesn't provide deck plans or (unless you're playing Trillion Credit Squadron) much in the way of useful support for actually using them in a game.
I think setting canon is an area where it's possible to have too much of a good thing and/or put a lot of effort into stuff that isn't terribly useful.
As a general rule, however, I and the people with whom I play do not play in existing settings outside of superhero rpgs (in which case it is Marvel, DC, or some hybrid of the two). Several of my players have no interest in playing in an existing tv/movie universe and several will also not play in a published gaming universe outside of WoD (which I will not run/play).
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