Custom worlds were not removed. You have to author the custom worlds, using XML, and then everyone who wants to play that world needs to have those settings. What happened was that the development team exposed the developer "custom world" settings button, but this was effectively completely broken. It did allow you to preview some changes, but it was entirely broken in multiplayer. Given the amount of data and change it required, as it was not fully deterministic, there was no realistic way to sync all that changed data nicely over multiplayer.Instead, we moved making worlds into data. This allows people to make and share worlds, and actually be able to play them in multiplayer. There were also hundreds of bugs with the "custom world" created worlds - that would not directly manifest them to users as being because of the custom world.We would like to, in the future, add user interface to make the process to make player generated worlds easier so that players don't need to go into... Read more

Haha good. Plenty of bugs in the game but that behaviour legitimately surprised me! Have fun!

That's really strange. Could you try disabling the 'Mouse Wheel Zoom' option on the misc page in settings then starting a new game?

Mouse-wheel up will zoom the camera back into first-person. There is a bug currently where if you have your tablet in your active hand it won't work, but you can press E to switch to your other hand and it'll be fine again.