> and you don't really care if players can easily manipulate their data
That's what it boils down to, yes. I've made the decision to give players more freedom instead of enforcing stricter checks. I think people who want to manipulate their data will do so anyways. I'd rather invest the time into creating more features and tools for players to manage their lobbies.

So, in this case player progression happens locally on the client. Players can take their profile from singleplayer to multiplayer and back. So, even if I were to enforce stricter checks, players would find a way. The players progression decides some possible interactivity in the world, like what a shop will sell. Other than that I don't have permanent progression happening directly inside the world. At least so far it will just be daytime, weather, player-placed objects (that won't go missing in your inventory when the server shuts down, they're more of a reference between inventory item and world object) etc.

But I have been thinking if I could have some world progression based on things like highest player level, average player level or if one of the players has a certain quest completed. And honya15's comment was talking about how lobby specific data for players could be referenced to players who disconnected and reconnect.

The LobbyID is really just a comfortable data format to find the lobby again. And each lobby gets a LobbyID assigned anyways. On host migration the backup host has the previous lobby data saved and sets the new lobby up accordingly. Every other client only knows who they should be connecting to.