I think this is a player facing example of the distinction I’m making above about pre-prepped material as a skeleton for play.
Like you have the map of the old orphanage (sounds like a great campaign starting location!) and the key, but rather then filling in all the necessary, unpredictable, unwritten, unwritable, but inevitable details you are having players fill in some in a concerted effort to create backstory linked to location history. This sounds really useful in a haunted location, a ghost story, where some of the challenges are traditionally linked to the psychology of the characters.
Have you done it for a more traditional sort of location/genre? Say a ruined borderlands keep or ancient tomb?