The update is primarily focusing on pistons, rotors, landing gears, and grid deformations. These mechanics have been a top priority for the SE team during the last year - to have these things be as robust, stable, and intuitive as possible. The game’s physics are now more stable and creations shouldn't break, explode or do uncontrollable things under normal conditions with default settings.
You can read about the changes to physics in great technical detail on Marek Rosa’s blog: Blog.marekrosa.org
Additionally, the Mod API and Programmable Block API has received some massive updates in this release so be sure to check it out if you are a modder or a scripter!
Full list of bugfixes and improvements: Forum.keenswh.com