This is a fairly nice summation of the underlying process though. However, here this does make it metaphorically sound like "GM as spirit medium" or "GM as telephone operator." In order to engage the world, the players are primarily engaging the GM in order to decipher and interact with the apparitional fiction. IMO, this post also shows that there is a difference between "GM as spirit medium" who prioritizes a living world and one who does not. Also, this somewhat comes across as "playing to discover what the GM is thinking," where "playing to discover the world" for players requires first "playing the GM," which is a situation I think nearly all of us have experienced firsthand.
I don't see it as GM as spirit medium. I see it as the GM is literally imagining a model, and the players are trying to explore the model the players are imagining [EDIT: GM is imagining] through a two way street of communication. My problem with Pemerton's description is he tends to reduce it to a one way street (the GM tells the players). And I think overall a lot of the description of what is going on just feels reductive to me, a bit constraining. But what the players try to assert they are doing in that mental model is an important piece of the exchange here. The idea is what the GM is thinking is a mental model of a world. On a small scale that is very possible. I can imagine a house with six rooms, what is in those rooms, or better yet, I can imagine a house with six rooms lived in by a family of four (and know who each of those people are, what kinds of things they like to do, and what they have in the house). And the players can force the GM to expand this model ("who lives next door"----which will force him to form a model of another place). My point is it isn't the telling of things that matter here. What matters is the models the GM keeps producing in his head, and how the players tackle that model. I can also imagine very broad scale a world (who the gods of the world are, what the rough sketches of its past are, what key places there are etc). This is where notes, maps, etc help the GM to elaborate on the mental model and pin things down for the purpose of memory. So the model can get quite extensive. Still you will always have those moments of expansion (whether the PC are literally pushing beyond the established geography or exploring the established geography in greater granularity. My sense is the GM is always imagining something clearly in their mind. And that is the thing being explored. I think where the world can "disappear here" is those expansions can get lost to memory (this is why taking notes can be helpful). And if the players play in such a world long enough, it does reach the point where it feels like the sandbox is running itself (like Justin Alexander said). I have had long campaigns where that happens (where the players are familiar enough with the setting that is more like they live there, whereas when it started, even if they were born in the world and their character was 20, they were initially more like a visitor to a new place (they constantly ask the GM questions about who lives where, what religions there are, etc). But a year or so in they could easily be the pope of a church in the setting and know enough about it to be making meaningful decisions. They also know the geography, the institution, and inhabitants enough that they can just say "I want to go south into the banyan and speak with Lady Plum Blossom to convince her people to support the church's efforts". Before a year in, the players would have to ask "What sects are in the Banyan Region", "Who is Lady Plum Blossom and what does her sect believe?", etc
I do think it is is pretty clear no one is probably imaging the same model. My banyan might appear different when I think about it than when player A does, or player B. But there are still agreed upon points: there is a banyan, it is south of Li Fan, there are many sects there hiding from the empire, one of them is purple cavern sect (located in the far south of the banyan in the purpose caverns), they are led by lady plum blossom. And having an actual map makes it easier to get everyone on the same page. And again, notes and maps, these all matter. They all serve as foundation. They just aren't dead. We are all able to imagine something very vivid happening in those spaces, helped by the fact that we have notes and a map, but still something that makes the players very much feel like they are there in Li Fan, ruling their own sect from the court of Bone Kingdom. And ultimately that is the point of this style: that people feel like they are there. As long as that is achieved, and as long as they are able to make meaningful choices, as long as things and people around them interact with them in ways that feel real, then I would say it is more than the GM telling them, or more than them discovering what is in the GM's notes (especially if you are leaving plenty of room for the GM to be surprised---to me this later point is key).