Rendering a new part of a world from before 1.7.4 will result in massive flat wall of new land masses. I explored a bit further in over the land and the entire edge of that section is plat or a perfectly square chunk as seen in picture #2.
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If I wander deep within the territory that has the flat walls, will it begin to look more normal in contrast to the rest of the world?
It is not exactly a bug. For this to be "corrected", the world generator would have to analyse all the previously generated chunks in order to mesh with them. This is impractical. For that reason this is considered working as intended. See MC-32622 for details.
If this was a minor update, why did I just hear from another support team member that there were ‘massive changes to the world generator’? He told me that even tiny changes can vastly change the outcome of the world. From his knowledge, this could vary easily happen from a small change. I just want to know why this is happening and if it could be brought to attention to determine a possible fix.
Because of large changes in the functionality of the world generator, chunks loaded with newer versions may be completely different from that of previous versions. For this reason these massive "walls" appear on the boundaries of the chunks.