My general rule is, you should be able to fit two fingers in between the jowl and the strap and two fingers between the bridge of the nose and the noseband.
The tighter the noseband, the tighter the poll pressure on the bridle, the jaw cannot move and thus cannot relax, and many horses will inadvertently bite/damage the inside of their cheek if the noseband is cranked shut - the noseband puts pressure on the soft of their jowls and pushes it into the teeth.
After auditing at a few clinics where I’ve seen clinicians go and adjust the noseband of a tense horse to a looser setting, and witnessing the horse visibly perform better, I am always mindful now of keeping my noseband loose as possible.
That being said, it varies from horse to horse - some horses, a cranked up noseband never bothers them. Some can’t even deal with it on the loosest hole.
The reality is, the noseband is now used to keep the horse’s mouth shut to hide an unsteady hand or evasion. People can deny this, but there is no other reason to keep a noseband on a horse in this day and age.
My current project is the first horse I’ve had that is so fussy about noseband tightness. He goes best in no noseband at all. I’ve found the lightest/thinnest noseband possible (it’s a Courbette noseband) and keep it on the loosest setting and a noseband is required to compete.