I am split on that one.
A known setting an do a lot for engaging with the player (the cliché about the Vampire players having long discussion about the lore), and the setting is definitely a reason why i would join a game over another, if I see a GM promoting a collective setting creation I wouldn’t apply for that game.
However, even in rigid setting, there is a lot of room for player brought element. So you’re a Noble ? What does your fief look-like. So you’re a robber ? How do you sell your loot ?, what does your favourite tavern look like which ease the GM job and gives players some control on the game world.
So While I don’t agree with Build the whole setting together, I definitely expect the players to bring their own elements to the table
I think, as GM, the art is what questions to ask.
The GM should keep control of the discussion. There is a big difference between open questions like “what are vampires in this world?” and closed questions like “what is the name of the vampire queen?” It depends on the group how open questions can be without everything devolving into insanity.