The little theory I alluded to yesterday was this (getting impatient for the Direct Feed footage).
At the end of the footage, Sonic jumps off some springs out of the city roads, and then we see this view. While there is still some city streets below that he lands on, most of the environment here actually appears to be very natural, rather than urban. More importantly, the green hills we see look like...well, Green Hill Zone. At the very least, the green hills have a very cartoony aesthetic, in contrast to the realism of the city.
I can't tell if it's actually Green Hill Zone with a city on top of it, since the footage is too blurry to make out a checkerboard pattern even if they were there. But at the very least, this leads me to believe that "Sonic's world" (the cartoony green hills) and "Earth" (the realistic city) might be fusing together in some way.
For the uninitiated, as part of the internal "Sonic bible" at SEGA, it's been said that the reason Sonic jumps between cartoony and realistic environments between games is because the Sonic game universe is split into two worlds - "Sonic's world" and "Earth". The games with more cartoony locations (the classic games, Sonic Heroes, Sonic Lost World) are Sonic's world, and the games with more realistic locations (Sonic Adventure, Sonic Adventure 2, Shadow the Hedgehog, Sonic Unleashed) are set on Earth (Earth is also where all of the humans are, they don't exist on Sonic's world besides Eggman). There is supposed to be a gateway that connects the two worlds as well, but we've never seen it addressed in a game. Maybe they're finally addressing it in-game though.
It's obviously just speculation right now based on one very small piece of evidence from blurry footage, but this could also help explain Classic Sonic being in the game too.
Tagging
@Swampasaur because he asked me about this.