In black holes, this process would break down in a particular way such that it's not possible to create more spacetime. That's why the amount of information a black hole can store grows with the area of the black hole, not the volume. There is no spacetime inside it for information to enter.

I feel like this could explain "dark energy".. spacetime piles up in the empty regions between galaxies, and the curvature isn't strong enough to create significant attraction, so at that scale, things end up moving away from each other. So basically the same idea you had I think, but opposite.

I believe in a stochastic process for wavefunction collapse, and I think entanglement may be related to the process of spacetime creation. Entangled particles are connected by a single filament of spacetime. This filament can only be used once before being destroyed, so it'd participate in the "resolution" necessary for wavefunction collapse, but then disappear. That is: there is no "spooky action at a distance" because from the entangled particles perspective they're still right next to each other in the graph of spacetime.

It was interesting to see that Stephen Wolfram seems to be suggesting something along those lines, but I'm not smart enough to understand if my ideas are similar to what he's proposing. I'm probably completely wrong anyway.