Old world connected: There are two possible ways to generate the Old World. You can generate overlapping fractals for Europe and Asia, or you can generate a single fractal for Eurasia. (Africa and India are fractals that partially overlap with Eurasia in either case.)
Fractals are made of land and water, with the land area combining when they overlap. In the first case ("Old World is connected"), there's enough overlap that the Old World will almost certainly be Pangaea-like. (Not completely certain. I have seen it end up as an almost-Pangaea separated by one square hex of water, particularly with high sea levels.) In the second case ("Old World may be disconnected"), the Old World is basically a Fractal map of its own, so it could be a pangaea or it could be separate continents.
"New World must exist" makes sure to generate at least one continent in the New World, which could be a North America or a South America, and increases the chance that you get both of them like on a standard Terra map.