I definitely don't want a hard cap to exp gain, where I gain zero XP from additional monsters/quests. That would feel like I've been punished for fully exploring the world. If I had to choose, I'd want a soft cap where exp gain is decreased. Combined with the fact that it takes more and more exp to level up in 5e (3800 for level 4->5, 7500 for level 5->6, 9000 for level 6->7, 11000 for level 7->8) this should be sufficient to keep completionists at a reasonable level.
E.g., For every 500 exp you are above the "Act-Expected Max Level" you gain 10% less exp (multiplicative) from monsters.
- 500 exp over? 90% exp gain
- 1000 exp over? 81% exp gain
- 2000 exp over? 66% exp gain
- 4000 exp over? 43% exp gain
- 8000 exp over? 18% exp gain
etc. You never gain 0 exp from monsters/quests, and it takes going *way* over the soft cap before it really becomes noticeable. If Act 1 was "capped" at level 5, completionists in might be able to reach level 6, but effectively it'd take ~2x as much exp. And like 20x as much exp to reach level 7, if even there was that much exp available.
I don't think that exp should be capped before a zone/act's max level. If you go and do a bunch of stuff before facing Gut such that you're level 5, then that means you probably had a harder time doing that stuff and so you're rewarded for that earlier effort with an easier fight. The important thing is that we don't have runaway exp gain, where a player remains overleveled for the rest of the game.
I don't mind diminished returns but I don't think completionists would complain for the lack of XP: my personal experience as a completionist is that you are doing it for the story and that the inspiration and items are enough as reward.
Second remember we would have a level cap anyway. Probably 10-14 (>14 anyway is a bit boring imo). The cap per area is mostly pacing the completionist toward that. Again the rushers are always fine as the game auto-adapt.
I agree on your last point: overleveling content is simply not fun.
