the source blocks will become buckets and flint n steel. I always build smaller than the limit. Not sure but there is a chance the protection may change the limits so i probably would make the island 2-3 blocks smaller.
Pretty sure anything outside the limit will remain the same yet as usual that bit won't be protected. Wiping 100's of islands that have a section that is larger than the limit would take ALOT of time and lag.
We aren't getting worldguard, we are getting a custom island protection. Worldguard is a whole separate plugin.