Quote: "FPSC on it's own I believe is simply a level by level design and cannot be used to make an open world that allows the player to freely explore at their own will."
You could, but you'd need a way to hide the level loading.
For example, you could create an open world out of 9 fpsc maps like so
Map01, Map02, Map03
Map04, Map05, Map06
Map07, Map08, Map09
You'd design some sort barrier, or corridor like in FPS games where you could pause to load the appropriate new map in.
Do you remember Tony Hawks American wasteland? It was an open world skating game, which used short corridors to hide the loading of the next section to give the illusion of a much larger open world.
It may not be ideal, but it'll allow you to create a massive open world using only FPSC.