For me it is to less smoothing.
The pace is jumping in a range of felt 25 seconds if I run around a constant pace of 4:40 min/km.
This range makes the Pace-value unuseable for me.
I've noticed similar behavior on my watch with the new firmware. The instant pace seems to jump around relatively erratically rendering it not that useful. I do like how the interval is shorter now, so that if you stop momentarily or fluctuate your speed throughout a workout, it will show that in a more reactive fashion.... however, it's just not very accurate.
For me, I usually train at somewhere between a 5:30 to 6:00 min/mile pace on the street, and I'm generally seeing the instant-pace displaying erratic readings anywhere from 5:05 to 6:10 on a run where the pace should realistically be pretty smooth at around 5:45. If I speed up for a duration during the run and do a fast mile, I've seen the instant pace say as fast as 4:40 Min/Mile, and I was probably doing more like 5:05 to 5:10.
I've gone on 3 runs with the new firmware so far and noticed this behavior on all 3 runs. I'll do more testing, and try to provide a little more info if I see anything else that could be helpful.