It'll be great - like the 8.3 transition all over again!
So if it doesn't have the manifest entry, the program will be assumed to not handle longer paths.
That puzzles me, then - why have a registry key to toggle being able to manifest that at all?
The more interesting question is why doesn't this build default that registry key to On in this Build. My presumption here is that the Win32 subsystem changes are possibly significant and there are some backwards compatibility concerns and so this is "feature flagged" until it's been tested more in labs/real world exposure.
EDIT: I don't think it would go down well, if some files cannot be opened in all applications only because of the path. I mean, Windows is the biggest enviroment for the most diverse set of desktop applications right now, so refusing to open files because your app doesn't support the path sounds unreasonable but I cannot think of a solution myself. Thus I'd like to know how they're approaching this.