I think the best thing to do in a scenario like that is standard procgen where you randomly, logically generate the rooms with a bunch of descriptive tags, and then LLM-ify the room descriptions, with some context for what the world/area is supposed to be like.
It can even dynamically extend by using prompts to generate new rooms as the user enters them, but keeping track of generated world outside of the LLM.
Which is the same way nearly all procedurally generated games work.
