I transferred an Xbox 360 world created with the newest patch (TU32) to my Xbox One and enlarged it once with the overwrite outer 32 blocks option on and once with that option off. Both resulted in an odd seam between the new land and old, the only difference was where that weird seam ends up. Definitely not what I would expect to happen.
Edit: The oddities I see when overwriting the world edges may have just been caused by some oddness in the particular seed I'm using. In other words, I'm probably wrong.