There are many layers to learning and many modalities. We know them without thinking about them. Some things are better learned audibly vs. visually. Some are hand/eye coordination centric. Few things are inexorably completely multomdal. Musical learning and practice involved every part of the brain and all the senses (or as many senses as you may be lucky enough to have), and so this is why it can be exhausting in a way that is unlike few other things in life.
Yes, there is diminishing returns in any practice. I have found this to be true for all skill pursuits, but my purposes here I'll directly compare guitar practice and flying. Both contain stupendous amounts of sensory input, musculoskeletal coordination, intellect and emotional content.
When I was working on my private pilot license, after I had been signed off to solo, I would go out and do touch and go, stop and go, full stop/taxi back/takeoffs and so on for a full hour. It was easy to see when I had unlocked some part of the process in my head and improved some part of the (again total brain involving) procedure. Refining technique, building muscle memory, all that good stuff. About 35-45 minutes into it I could definitely see where I peaked and the landings started to get crappy again. I'd force myself to do the full hour until I figured out that I was just burning money (flight time is expensive af). Diminishing returns on time investment, baby! (Dick Vitale voice)
You have to find the point at which you peak and stop there, before the frustration and scraping and scrimping to find the improvement. It's not there, and any time spent after that is a waste.
There is a study technique called the Pomodoro technique. This refers the the tomato (pomodoro) shaped 30 minute kitchen timers. Set a timer for 30 minutes on your phone or your watch, then start your practice. If you get through a whole 30 minutes with enjoyment and fulfillment and no distractions, great. Take a 10-15 minute break, minimum to put the guitar down, stretch your legs (your lymphatic system requires muscle movement to move fluids through the body), take a piss (a full bladder is a creeping distraction - don't wait until you're uncomfortable), drink water (8oz). Then set the Pomodoro for another 30 minutes and practice. Repeat until the first moment you feel frustrated or unenthusiastic or distracted by your phone. That's the stopping point for the day.