From my understanding, it isn’t a whole new game client. All it is, is a new separate Map. A game server can only run 1 map at a time, so dedicated servers have to choose which map to host. Since it is a separate database, you start fresh on the new map, but the old database on the old map remains to be booted up in the future.
It makes sense that they would do something like have old NPCs available via portal. This keeps them from having to create a whole new set of named NPCs just for the island, while ignoring all those they have created before, and keeps with the story for why this named dude from the Exiled Lands is now on the island.
It will be a lot of fun to start fresh again.