I suppose it depends on what you consider 'updating correctly'.

An old world (pre Mistlands drop) with unexplored areas will still have Mistland biomes, but they may be smaller, rocky and steep islands.

The patch notes stated a new terrain generator was introduced that will make Mistland areas larger (and for many people it is more playable).

Your mileage may vary.

i tried both ....a new seed works better from what i have seen , mistlands do appear in unexplored areas on my existing seed but they are much smaller and broken up compared to a new seed which has vast continent sized mistlands. , also my old seed they are far out on the map , with a new seed they are closer