This is a rarely talked about feature and AFAIK, no game implemented. Limiting each characters ability to gain XP for a maximum of 8 hours per day creates real competition.
Without this, there really isn’t a reasonable level playing ground. Some players will run their characters (friends) for 24 hours, which feels ridiculous and unfair to realistic players.
Competitive objectives (leaderboards and rewards) for zone speed running and PvP would be good and competitive. PvP could be limited to 8 hours a day too, so someone playing both could play for 16 hours if they wanted.
If there aren’t these types of leader boards, then there’s no reason to limit anyone’s time. I do think creating competition is most important. Grinding a character to some hard-capped maxed level then expecting an expansion for new caps won’t be popular.
You don’t want to ruin the competition for the long term players that stick to one character, but you don’t want it to feel like it’s pointless to start a new character at any time.
I wish there was no level cap, just diminishing benefits.