I think I struck up a really good idea to increase height limit without sacrificing render performance. From the image of the new mountains, I've concluded that, since the clouds are at Y=128, the top of the mountain reaches around Y=200. Since there are 56 blocks of room left, we can use this to our advantage.
Make the height of average surface and ocean to around 100 instead of 63 and clouds at 165 instead of 128. This will give caves an extra 37 blocks of height to generate whilst giving players roughly 19 blocks to build on top of mountains (Which is what the max on the image was, so I'm guessing there will be many smaller mountains.)
This depiction isn't perfect for balancing mountain building and cave height increase, but nonetheless, this example shows that the height limit can technically be increased without having to increase it. This would give Minecraft servers an edge in porting to the latest version once they are able to do so.
And on the topic of loading new chunks in an existing world when a new update arrives, it is already messy and I tend to see landscape a couple dozen blocks sticking out of the air such as a new biome, so it wouldn't be that different!
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