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I never played the earlier WFB, but I occasionally looked at it and when it became age of sigmar I thought the fluff was that the old world was destroyed, but maybe I am wrong? With the release of the stormcast and the other faction and models in the starter set it seems like it will be some new factions never seen before? So storywise what does that mean for the other factions like elves and dwarves and empire? I know they can be played with aos rules, but do they even technically exist in the fluff for this new world? Or do I have the whole thing wrong?

They exist in the setting as races and as members of their part of the alliance. All their kingdoms from the old world are gone. These factions have no connection to the old world as far as I remember from reading the AoS rulebook.

All of the factions still technically exist, and most of the non human ones have had some mention so far, but they're all likely to undergo some big changes.

Storywise, the old world is gone, and exists mainly as a legend. Some of the characters from the old world are gods now, which seems to be the main connection.