Do any orgs explicitly ask the engineers themselves decide how to allocate a certain percentage of story points in a given sprint?

Product people are great for selecting which features to build out and which bugs to address, but are poorly equipped to decide how to prioritize things like: performance optimizations, bugfixes that haven't (yet) been reported by the end users, code refactoring, paying down tech debt, modernizing tooling, misc quality of life improvements for the engineering team, etc.