I think one thing to keep in mind is that despite the extent of world building a DM/ST puts into a project, there needs to be room for growth in the cultures, politics, religions, settings, and races populating the world. You can map out the setting, establish the boundaries and the races and the general information, but no two characters are going to play in that sandbox you've set up the same way. Even if they share the same background down to the room they were birthed in, but players interact with the world differently, and that's where the world building really ends and begins.
It's not that you stop creating a world. It's that the life within the world you've created will start to define how systems in place are used. A street is just a street until there is a scene located on the street. A piece of lore in only lore until a character stumbles across a hidden passage of text scrawled on a wall beneath aged and peeling wallpaper. A race is only a race until someone takes the tools you've given them, and creates a warrior known far and wide who bears a striking resemblance to how you described elves to look. World building never actually stops because there is always another story to tell in the world itself. That expands upon what is known, adding more information to the mix, and it can keep going as long as there is a playerbase.
A good example, I think, is the evolution of the Star Trek fandom. Star Wars, too, but I'll use Star Trek as my example here.
So, a tv show that was televised in the 60s now has how much lore attached to it? We can agree it's a ton of lore. Of worlds and world building. Of pure content.
World building stops when the people involved in the world building call it quits. That's honestly how I feel about it, anyway.
Also, I ranted a bit, but for a tl;dr
I think the group decides how much lore they want, rather than the DM. I say this from personal experience, but each group is different.
Players should have as much say in a world as their OC does. If they play a well-off Duke in control of his duchy, it's safe to entrust the player with that responsibility. If they play a beggar, they probably have very little say in the world building because they're not actively able to be involved in a plot of that sort (or maybe they surprise you and pull some Prince and the Pauper bs story).
AND I'm big on not telling my players lots of things BECAUSE PLOT. I even say it like that, too. If they come across something, I'll let them know. If they want to work around said plot, they have to seek out the means IC. They trust me not to metagame, and in turn, I trust them not to metagame.
If you can't trust your players, who can you trust? D:
