For context, I was a casual guitarist for many years before deciding to finally start learning music theory through jazz piano lessons about a year ago (which I highly recommend btw).
I think it's important to look at theory as descriptive and not proscriptive. Music is fundamentally heard, but having a common written/spoken language with well-defined terminology, structures, idioms, etc. allows musicians to communicate more clearly - eg. "sixteen bars of I VI V I in C major" vs actually playing it.
It can be both. For instance you can choose to work within a particular framework when composing and arranging, and this will lubricate some aspects of the process, and give you the confidence that you can actually do it. I'm not a composer myself, but the two bands I'm in both play some original jazz compositions and arrangements. I imagine that trying to come up with a new chart, completely ab initio would be a phenomenal chore. And possibly unplayable. One that we played last night for the first time is about 50 pages of music all told.
Perhaps another explanation is that in between analyzing and creating is the "trick" of borrowing from the past, that is a staple of virtually all creative endeavor.
But people have told me that theory won't help you write catchy melodies. Those come from somewhere, and some people are just good at it. But filling out the 19 parts of a big-band arrangement involves that framework.
Introductory-level music theory is usually taught to beginners learning an instrument. Simple scales, chords etc. The YouTubers I've watched recently all add the caveat that this is 'western' music theory and other cultures have different preferences.
I think it's important to look at theory as descriptive and not proscriptive. Music is fundamentally heard, but having a common written/spoken language with well-defined terminology, structures, idioms, etc. allows musicians to communicate more clearly - eg. "sixteen bars of I VI V I in C major" vs actually playing it.