Scaling simply means resizing to fit. When the wallpaper was a simple image, that meant until it fit edge to edge along the smallest dimension. Now that you are scaling for the parallax that means virtual edge to virtual edge, which includes the necessary boarder space. You've never been able to view the full image unless it happened to be the exact dimensions of the iPad's screen. Even then you would have some zoom in either the portrait or landscape view, depending on the orientation of the original image.
I admit, this is no longer intuitive, since the boarder is not obvious; however I don't know of what other description (in under a paragraph) Apple might use to describe the resizing of images to fit the wallpaper. At least not one just as subject to misunderstanding as scaling.
Like before, if an image is bigger than necessary then it's shrunk until it fits (plus the boarder). If it is two small it is zoomed. You can still zoom in on the image, though it can be an exercise in patience. Each time the wallpaper is moved or resized it recomputes the parallax effect. On older iPads this can mean the wallpaper settings controls can freeze for several seconds.
What it all boils down to is that some older wallpapers aren't going to work well, or at least not as expected. The choices are: be unhappy and maybe
complain to Apple in hopes they will change their mind, consider it an opportunity to find a new and hopefully better wallpaper, or dive into wallpaper tinkering and/or creation for yourself.
I don't have much hope for the first choice, though I suppose Apple 'might' 'eventually' include an option to turn off parallax entirely instead of just reducing (stopping?) it's motion.