I heard back from support.
This feature is intentional as others have described above. Different rolling resistances on different road surfaces. Older clients apps have an advantage over up-to-date clients.
The tuning seems completely wrong to me. We are talking about a 1-2watt/kg penalty at race speed for riding on the jungle circuit using the new app vs. the old app.
Here is a Youtube video from a race yesterday:
In 90 seconds, you can witness what everyone above is talking about. Two C riders passing an A+ rider who has to output 600 watts just to get into their draft, which he is unable to hold
My advice for now would be:
-avoid any races with extended gravel sections
-plan to sprint through any shorter gravel sections, just like going over the top of a climb
-hit the vote button above so that the Zwift devs notice this thread and detune this change