This sounds like an approach to play in which the GM says things about the (imagined) world, which the players are expected to use as the basis for inferring further "true" things about that world - the first quoted para from the GM point of view and the second from the player point of view. Call of Cthulhu modules feature a lot of this sort of thing. So do a number of D&D modules, though in those the inferential connections are often weaker and so the players' dependence upon revelations from the GM often greater.
Personally I don't feel the force of this. Partly for reasons given by
@Mallus and
@uzirath in posts not far upthread; partly because in my own experience there has never been a problem incorporating player-introduced elements into the shared fiction. JRRT was doing this with his own work all the time, and he was holding himself to a much stricter standard than is necessary for fun and successful RPGing.
I don't know enough about the agenda and principles for Masks to comment; though I do note
@Campbell's suggestion that the approach you describe here does not fit with them.
In my own experience of "story now" play - using systems like 4e D&D, Classic Traveller, Prince Valiant, Burning Wheel, Cortex+ Heroic, Cthulhu Dark and Wuthering Heights - the only one which I might say that the characters' stories are
not defined by their emergent interactions with the world is Cortex+ Heroic, because the character Milestones to some extent pre-define character arcs. Even then, however, there are moments of surprise. The two occasions I can think of at the moment where Milestones were completed were both quite unexpected - Nightcrawler completed his Romantic milestone by teleporting his date, who was also a supervillain, to the top of the Capitol Dome to propose to her (she said yes) only to jilt her the next day at the altar; Dwalin completed his Dwaren Halls milestone by returning to Moria with the rest of his companions in order to hide from the crebain out of Dunland who were spying on them.
I don't want to lean too heavily on the nitty-gritty of your phrasing, but in my experience the world of story now play is not
defined by characters' dramatic needs. It is narrated in response to them, which is different (perhaps that counts as being defined
around those needs; but that's not the same thing). In my Prince Valiant game the PCs were able to rescue an abbot and return him to his monastery - but it wasn't until one of the PCs spent time there tending to the sick (successful Healing check) that the idea of religious devotion, and the founding of a Holy Military Order, the Knights of St Sigobert, became a part of the game. I would say that that was precisely a case of a character's story emerging from interactions with the world, and of constituting an exploration of the themes presented. I think this is very typical of story now RPGing. It is what
@Manbearcat is trying to get at in his contrast with characters who don't change, or who have pre-given "through lines" of dramatic arcs (the DL modules are paradigms of this).
In that last sentence - which contrasts
learning as we make them with
finding I can't tell if the complaint is about
who does the authoring, or
when it is done, or both.
In my Prince Valiant game the PCs were talking to an undead spirit which would let only some of them pass through the Dacian forest it was haunting. The players (and their characters) formed the view that there must be an "anchor" or "focus" of its haunting; and one of them spent a player-side resource (a Storyteller Certificate) to Find Something Hidden - ie the focus of the haunting. As GM I duly narrated something that that character's PC, who was one of those allowed to pass, found. I'm not sure if the players could tell that I was making it up on the spot; I'm also not sure if they cared. It
was under their control that their PC found something; it was not under their control what exactly it was.
In the Burning Wheel game where I am a player my PC and his sidekick were travelling through the wilds of eastern Ulek/the western Pomarj in the World of Greyhawk. My sidekick has trained as a sorcerer and is learned in the lore of the Great Masters (ie has Great Masters-wise skill). I declared, as her action, that she seemed to recall that Evard's tower was located in our vicinity. A check on Great Masters-wise was successful, and we found the tower. I don't know if this counts as "freely generating" or not - it required engaging the action resolution mechanics like any other action declaration, and hence had the same risk of failure and adverse consequence as any other declared action. To me there was definitely the feeling of
finding out - the focus of that feeling was watching the dice come up a success rather than a failure.