no only that region so you can explore a whole region on someone's world. for example lets say you where in brightwall you can go anywhere in brightwall except for the library because you need both players to enter the door same goes for leaving the region.
so its not like fable 2 where you follow the other player around the region. The only time its like that is entering a building like the brightwall library. so you get to free roam the region by yourself. you can stick with the other player if you want to.