In the context of playing with other musicians I see it as listening to the others and fitting in, not over playing.
As for doing solo work it's called reading a crowd and that is a very valuable and overlooked skill.
I've always told people who book me for parties that I know when to put the music out front and when to back off . Seen too many DJs and bands just blast their way through a gig and not adjust.

Knowing how to sit in the "POCKET" when playing with other is an experience you have to acquire thru many years of performing on stage, .....many never do get it,.....but when it's right it sounds amazing!