I have used my old world as a test.

Here is how it works:

For old worlds, the boime is more compact, in new worlds it apparently will be wider.

In old the old worlds: Loaded/rendered biomes are a bit larger than what the map reveals.

Previously loaded mistlands will get terrain updates, new hills and lower grounds, monsters spawn but there is no fog, no plants, dungeons or buildings.

Unloaded biomes, will generate all new features as expected.