I imagine it used when somebody asks about "hypothetical or fictional planets, or alternate Earths". Still, it might not be the most appropriate tag, since I suppose (rather, speculate) that the motivation for most of such questions is not necessarily "world building" in the sense of, e.g., a science-fiction work, but more for modeling or simple curiosity.
It appears those questions are about hypothetical/fictional planets. It appears there is some consensus that such questions are on-topic, but I'm not sure whether world-building is a good tag to use. The purpose of modelling a hypothetical/fictional planet is not to write a science fiction novel, as questions on World Building SE are. The purpose is to better understand processes within a model.
I welcome suggestions for alternative tag names and we can rename/remove the world-building tag.