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Not just saved data, but all your islands, all your progress, all linked to the character, not to the map you are playing on. Creating a new character usually means you plan to start all over with a new fresh world. Technically, I think you can play an existing one, but I think you will have a real problem with progression on a map played with a different character prior to the new character.
When you start again, you also need to create a new character and have that selected. Just starting a new world does not start your character over. You need a new character too.
It is a bit confusing but the reason I think it is designed this way is so you can take your character to a friends (multiplayer) world and you will bring your home island with you that way.