Is this tested?

It is based on landfill removal scripts I wrote for 1.1 multiplayer, and used many times. Here it is adapted to change the tiles not remove them, but it is mostly the same. If you want to test it yourself, open /editor after running the command, then delete all the landfill to see that it acts properly when removed.

Why does it rarely place a non-water tile under the landfill, like red desert?

It is two reasons. #1, a few non-water tiles could always get turned to landfill on shorelines. I don't understand the details but this is normal.

#2, 1.1 and 2.0 differ slightly about how shorelines are smoothed. If you used Delete Empty Chunks to reroll the entire map in 2.0, you would notice slightly different smoothing of corners on all shorelines, also different decoratives.

This only happens on shorelines and doesn't cause anything weird-looking. It won't put a land tile in the middle of water.

It will never cause a large difference, as 2.0 still understands how to generate 1.1 elevation & water, which it calls a "lakes" map.

100% faithfulness to 1.1 would be possible by running one script in 1.1 to export data, and different script in 2.0 to use 1.1's data. If someone will actually use this and wants it, I will do it if it is requested. I'm unsure anyone cares given how rare any of this is, and unnoticeable.