[K Peculier]

It's a pretty gnarly double-edged-sword when it comes to the freedom of roleplay in a game with a fantasy setting and the gameplay to come with it.

Personally I am heavily on the side of full on total immersion as a direction to move in as my main preference. Trex has more or less compiled a pretty useful set of answers for the questions you have.

We're stuck in a limbo of a set of people trying to roleplay a deeper, engaging and ultimately more complex way of life within the characters we create and well, the majority (in my opinion) being more comfortable and used to treating the world more like a 'Game' with inconsequential problems when it comes to subjects like poverty/cultures/laws/crimes/food/etc as they aren't explicitly tied to a gameplay aspect that monitors it. (Jail timers/Hunger(Punishing)/NPC reactivity)

The dissonance can be very jarring as you can have a mid-level adventurer party on one side of a bar going on classic fantasy adventures and the other half could essentially be a dating chatroom with very modern values and a lot of current IRL slang thrown in.

I don't really see a perfect solution to making all parties happy. We could heavily enforce a super immersive but strict environment where players need to respect and policed to follow a setting--But nobody wants to bossed around like this and many will have their own perception of what is "in-character" enough.

On the other hand we could stick to specific groups that would prefer the focus of their roleplaying be centered around more serious and stricter settings, while having another group on the opposite spectrum who are just happy to have an outlet to roleplay a different façade of their real selves and chat while enjoying the gameplay itself.

Though this naturally leads to a fractured player base and many would call it as 'Meta-Groups' or elitism.