Are you tiling just the backsplash (just the area above the counter), or the whole wall (down to the floor)? If you're doing just a strip above the counter, you should not extend it beyond the cabinet ends. If you're doing the whole wall, I would extend the tile around the corners and to the ends of the wing walls. I wouldn't stop the tile short on the left wall.

I agree with catbuilder. As you mentioned the 60" feeling cramped formerly, I'm wondering whether tiling all around on the sides might not make it feel a little claustrophobic all over again? I vote for just the long central wall, either as a backsplash above the vanity only, or as "wainscotting" tile. I'm guessing the "wainscotting" could be really eyecatching, like a frame for the vanity, setting it off in a good light.

I just went on Houzz and started looking at powder rooms. There are ~ 12,600 photos. I would go through, and see which ones you like best. From what I saw, all your options are represented, so there's no one right or wrong way to do it. Just what you like, (and can afford...LOL)

Here's one example of the tiling done on all three walls:

[Traditional Powder Room[(https://www.houzz.com/photos/traditional-powder-room-ideas-phbr1-bp~t_713~s_2107) by Chicago Interior Designers & Decorators Handman Associates

Raehelen, I just love your humor and BTW, I love those over the top sconses!

Thank you all for your responses! The plan is to tile the wall from border to the floor. Tile installer said it will be easier to do that than to make cuts to fit tile around vanity. I am using marble look alike ceramic tile, so it will not cost much to do just that.
I have spent a lot of time on Houzz and it is where I came with idea to do tile backsplash instead of quartz.
My struggle with going all way to the corner is that I will have to finish edge off somehow and it will look different than edge by the door which will be hidden by door frame and not require any trim.
Another option is to tile the central wall all way to the ceiling. Drywall will have to be removed anyway. I have a giant mirror glued to it. So I am trying to picture the entire wall of polished tile, big framed mirror and 2 crystal pendants hanging from the ceiling. Is it too much? Crystal pendants came to the picture an hour ago when I was browsing lighting fixtures store. Originally I was going to do sconces on both sides of mirror and talked myself into downsizing mirror to leave 3-4 inches on each side of the sconce. But with pendants I will not need as much room on sides.
And thank you for not criticizing me for putting 48 inch vanity into 60 inch alcove. I really love the look. Also inspired by Houzz...

Marble, crystal, big mirror? Sounds good to me. "Too much?" you'll have to make that decision. The elements sound lovely.

Thank you for posting the question L.Ann. I have the same decision and not sure what to do.....

Only difference, I am putting the sconces on the wing walls so I can go with a larger framed mirror.

Welcome to the club, mdln! I am still un-decided on how much to tile. As for now I think about doing Option 3 and continue it to the tub/shower area and then on the toilet wall. Then stop and have a big wall painted. It is where I will put TP holder, towel rack and light switches. Said Good Bye to crystal pendants, decided to do sconces on each side, so mirror will be only 34 inches wide. How big are your vanity and mirror, mldn?

The vanity is 38" and is not the most practical, but I have a lot of storage space, I really liked it, and it was on sale........

Have not chosen a mirror, want to get everything else in place first. Am thinking of a 36" wide rectangle shape framed mirror. Height to be determined by what is available.

Wow. It is a beautiful vanity. Your bathroom will be very special with great focal point. My stuff will be very traditional, that's why I am obsessing with marble listello as a backsplash. To add something special to otherwise "safely" designed bathroom.
Have you tile picked up yet? Marble?

@ L.Ann - originally (when I bought it) was going to use a carrara looking porcelain tile, then I decided to use real carrara for the kitchen counters.

So am now back at tile stores looking for something to go with this. If anyone has any suggestions, please speak up!

Well, I went backwards then. I chose marble tiles for floor and walls and then decided to go with porcelain. But I kept originally picked listello and trim!