: The advantages and disadvantages of Fantasy-time Many works of the High Fantasy genre are set in a pseudo-European fantasyland, in a rather amorphous time-period that mixes early-medieval and late-medieval

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Constraints!
I would be interested in both; the historically accurate vs the "alternative history" or "general past" setting. I'd also suggest there is a spectrum; at least I see it that way in my own writing.
In both cases, the advantages and disadvantages arise from constraints. Or as you said, "limitations."
Is it possible for historical correctness to detract from the setting,
I think, to be more accurate, it could make the setting both richer and more coherent or consistent. But it can certainly detract from the plot, and alienate some readers, particularly female readers, LGBT readers, etc. The medieval past was over-the-top sexist; not in every culture but most of them. The Old Testament, read literally with an eye toward the treatment of women and children, is a good starting point. The same for strict Islamic codes; these guys were not kidding around; women were property and did what they were told or they were beaten. A man raping his wife or female slaves was expected. There are instructions there for how to sell your daughters, etc. The vast majority of marriages were arranged, by men for the women they controlled, for financial, political or social reasons: Effectively sex slaves traded by their owners for personal advantage. Children were likewise treated as slave labor.
I think most fantasy readers prefer a less dark world for more than half its population, and want some notion of Romantic Love, self-agency, and other modern social interactions.
Accurately portraying the technology is one thing; accurately portraying the culture is another. I could certainly appreciate an accurate portrayal of the technology; that would be informative, and the constraints on the characters make it a bit more difficult for the author, but to my mind in a good way, there are no free deus ex machinas to get the author out of a plot jam, or solve a character problem quickly. (Maybe that's the job of magic.)
Accurately portraying the culture is a different thing. Fiction needs to be relatable to the reader, and modern notions of family, marriage, sex, love, religion, sanitation and other cultural phenomenon are far too different than what was commonly true in medieval times. To me, those constraints would prevent the vast majority of readers, including me, from relating to or enjoying a story; I think the attitudes are too alien.
The disadvantages of the mash-up.
The big disadvantage here is the risk of incoherency. As you suspect, various inventions and cultural innovations have ramifications and consequences. Introducing an invention from the 1600's to solve a writing or plot problem in the 1200's may ignore a dramatic shift in cultural or scientific knowledge that the invention to easily solve a writing problem can ring false if the other ramifications of that invention are not realized in the story as well. If the reader knows them.
However, this is not always the case: Ulfbherht Viking swords from the ninth century are an example. From that link:

Dozens of these swords — made with metal so strong and pure it’s baffling how any sword maker of that time could have accomplished it — have been found in Europe, along with some knock-offs. They are all marked with the Ulfberht name and two crosses, though some of the imitations are missing a letter here or there. [...] At the time the Ulfberht swords were forged (approximately 800–1000 A.D.), equally perplexing swords made of a substance called Damascus steel were being produced in the Middle East out of a raw material, known as Wootz steel, from Asia. Both Damascus steel and the Ulfbehrt’s so-called “crucible steel” had high amounts of carbon. [...] It was thought, before Ulfberht was discovered, that the capability to remove slag to such a degree only became possible during the Industrial Revolution. Iron ore must be heated to 3,000 degrees Fahrenheit to accomplish this, a feat the Ulfberht makers apparently accomplished 800 years ahead of their time.

Thus, I'd posit that mixing might not be that bad, steel to rival our own modern steel was being made and used 1200 years ago, but did not result in an industrial revolution, new architecture like skyscrapers, vast machinery, etc. The only artifacts left using it were swords. Perhaps other modern ideas can be introduced and what seem like "obvious" ramifications can be ignored, for cultural or religious or economic reasons: Perhaps Ulfberht steel was too expensive to use for anything other than a sword: The strength of that steel made it light, fast, magically flexible and difficult to snap, and so hard it could cut a man in half and still hold a razor edge. Perhaps the failure of imagination is not considering these properties separately, thus not imagining any other use (like machinery, architecture or shipbuilding) that would not demand all of these properties.
I think the advantages of the mash up (including the lack of scholarship demanded) must clearly outweigh any value of accuracy. Its why we invent our own worlds and maps, and give our medieval peasants cultures not too realistic for their time, so our readers can relate.
I always go for that option; I prefer to invent my own constraints and culture, and even if the setting is medieval or even more ancient, I invent the constraints within that setting too. I've done the same in modern times: Put my characters in a town I invented with politics, landmarks, facilities and what not of my own invention.
Consider (as I do) your setting as almost like a character you invent. It presents both opportunity and obstacles. e.g. a private place where teen lovers might meet is easily found. Food and water are easily found next door. The local university has an expert in what you need. OR, the place where action X must be accomplished is two hundred miles away. The town where your father took a job is extremely homophobic. You have to go to a school three steps down from your previous awesome school, that bores you to tears and has effectively robbed you of two good years of education, and apparently everybody in it loves country music that you despise and considers the music you like literally evil and blasphemous.
I invent my setting like I invent my characters, and would not use a realistic setting just like I would not try to invent a character matching all we know about a historical figure. While many readers might like a fictional but accurate adventure of, say, a twenty-year-old Thomas Jefferson, I couldn't write it.

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High fantasy rarely bears much resemblance to "capital H" history even when it has been inspired by a particular period as magic rather than technology tends to dominate the setting. Instead high fantasy tends to show a stylised mythological version of the past that may or may not be based in a particular period or region. If you want to use a particular era in a particular place and show it to be so you can but generally the setting of any fantasy story is only a backdrop for the story's characters and their actions so if you're writing Fantasy, as opposed to Alternate History, use what you need to get the story written since it's not the/a real world. Which in no way means it shouldn't be internally consistent but it need not be externally consistent with a specific piece of history. If you are writing Alternate History you really need to get your history spot on though because the accuracy of what you don't change is critical to selling what you do change.

In terms of writing high fantasy in non-European settings I feel that Asia and the Middle East present both opportunities and limitations. In both areas the age of mythology, when history was spoken and recorded as saga rather than date verified written account, is still relatively close to the present compared to most of Europe. This means that there is a lot more to draw on as inspiration for fantastical accounts but it also means that there is relatively little room to draw outside the accepted bounds of existing legendary accounts.

The advantage of mix-and-match history to the fantasy writer is obvious, you don't have to do deep research. As long as you're consistent you have a great deal of latitude to write history as you think it should be for a particular story in a particular place. The disadvantage is that if you're not drawing on a particular place and time you have to, depending on the tone of the piece, pay more attention to being internally consistent and/or explaining discrepancies. Discworld is notable as a piece that can ignore this completely due to it's lighthearted approach to the fantasy genre.

The advantage of using a particular time and place as a basis for fantasy is that it provides some baseline material to work from; both a historical framework that includes geographical and geopolitical relationships and a base set of mythology that has filtered down to modern times from the cultures of that time. This framework makes consistency easier and gives an author inspiration in many fields. The problem with historical accuracy is that it jars people to realise that, for example, there were still mammoths in Europe when the Egyptians were building the first pyramids. Real history is actually far stranger than most people either realise or are ready to accept so true historical accuracy runs the risk of alienating ones audience.

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High Fantasy is a genre that has its own rules, just like Steampunk or "Flintlock fantasy" have theirs.

There are examples of more "historically accurate" fantasy works which are placed more firmly in a specific country and historical epoch (GRR Martin comes to mind), but then it looks like the work would lose the gloss and awe of "High Fantasy" and becomes some other kind of fantasy. Why is that?

My opinion is that Dark Ages were called that for a reason. It's difficult to write a "high" period novel while skipping ugly parts of historic reality. This is why characters appear not only dressed like they are from XIX century - their mindset is "enlightened" and conform to post-renaissance rather than medieval standards.

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Wikipedia's Definition of High Fantasty Genre:

High fantasy is defined as fantasy set in an alternative, fictional
("secondary") world, rather than "the real", or "primary" world. The
secondary world is usually internally consistent, but its rules differ
from those of the primary world. By contrast, low fantasy is
characterized by being set in the primary, or "real" world, or a
rational and familiar fictional world, with the inclusion of magical
elements.

The works of J. R. R. Tolkien are the archetypical works of this genre, meaning that later works often pull inspiration from Tolkien. Lord of the Rings, as you note, is set in a medieval-like setting, so guess what, later authors of the high fantasy genre in the English-speaking world set their worlds in a medieval-like setting. This is similar to how Jane Austen's novels have inspired and created a whole Historical Romantic Fiction genre in modern times, or how Arthur Conan Doyle has created the archetypical detective character, Sherlock Holmes, and detective fiction in English literature. The original authors of these classic English works came from European backgrounds, so of course, they would write about what they knew of the world at the time, from a European perspective. Language and culture cannot be divorced from each other.

For a High-Fantasy English-Language story, check out The New Legends of Monkey. It is a high-fantasy TV series, based on the Japanese production from the 1970s and 80s (the West actually becomes acquainted of several things of Chinese origin through Japan, mainly because Japan was the first of the East Asian countries to open to the West), which is based on the original Chinese classic novel by Wu Cheng En. The setting is obviously East Asian-inspired. The characters don't eat with chopsticks; they eat with two-tined forks. The architecture looks very East Asian. The religion is inspired from East Asian Buddhism. The cast speaks English, which means the characters actually refer to each other by names instead of by relationship. The gender of the characters also changes, conforming to Western gender expectations. The Tripitaka character is female, probably because the producers don't want the film series to be too religious/Buddhist, and Tripitaka's character feels too feminine for Western viewers - gentle, kind, altruistic, naïve. The Sandy character is female, probably because "Sandy" (a popular translation of the real character's name) sounds like a girl's name. Monkey and Pigsy are kept as male. Apparently, it doesn't matter if the story is High-Fantasy Europe-influenced world or High-Fantasy East-Asia-influenced world. In both worlds, people introduce bizarre anachronistic elements.

However, the main point of a High Fantasy story is to create a make-believe world that mirrors our own, but has a different historical timeline from the very beginning. So, stuff like swords and cannonballs, which may be invented at different times in our history, may be invented at around the same time in the fantasy story but two rival sovereign states. Hence the seemingly anachronistic stuff you see in High Fantasy novels may make sense in the novels' own history of the world.

Advantages of a Fantasy Setting:

You are writing a High-Fantasy novel.
You are free to imagine however you want about the world. Your imagination is boundless. Just make sure to keep your plot consistent, though.

Disadvantages of a Fantasy Setting:

There are not that many fantasy authors who focus on the language component of fantasy writing. Often, they are stuck with Latin script and random names. Fantasy authors may go further and assign meaning to the names, but they often do not really get into conlanging and actually invent a real language, so the invented names provide absolutely no clue to the actual language.

Advantages of a Historical Setting:

If a work is set in an actual historical setting with a lot of realistic elements, then it isn't High Fantasy. It's Historical Fiction. The advantage is the type of audience you are targeting towards.

Disadvantages of a Historical Setting:

This is just too much work, man. One must have a huge body of historical knowledge to write such a work. Even folktales aren't really all that precise. That's because the main point of the story is the conflict and resolution. Historical accuracy really isn't the point of it at all, unless it interferes with the plot development. One kind of eating utensil the characters use will probably not interfere with plot development. However, gender roles will definitely interfere with plot development.

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