Updated the description in an effort to make it more readable. (Deleted information about how it is not acting like the old system r^=r and assumed intentional results should be r^=r-1)
I don't mean to sound impatient, but I am currently working on a map and am stopped until this bug is fixed, either to the old system or the new system, or is going to be around for a while? Basically, where is this bug in the list of to-do, and how is it planned be fixed?
However, the new r=2 is picking up entities further than 1 block away.
Oops. Typed it right in Minecraft. Guess I was too hasty here.
It appears that this bug has been fixed in Minecraft 1.9.4. The radius selector finds all entities at a radius of <r. It works almost as it did before the change; I don't know if this is intended or not.