With the new enhancements to the functionality of format-time-string, time-stamp-format will change to be eventually compatible with it. This conversion is being done in two steps to maintain compatibility with old time-stamp-format values.
In the new scheme, alternate case is signified by the number-sign (`#') modifier, rather than changing the case of the format character. This feature is as yet incompletely implemented for compatibility reasons.
In the old time-stamp-format, all numeric fields defaulted to their natural width. (With format-time-string, each format has a fixed-width default.) In this version, you can specify the colon (`:') modifier to a numeric conversion to mean "give me the historical time-stamp-format width default." Do not use colon if you are specifying an explicit width, as in "%02d".
Numbers are no longer truncated to the requested width, except in the case of "%02y", which continues to give a two-digit year. Digit truncation probably wasn't being used for anything else anyway.
The new formats will work with old versions of Emacs. New formats are being recommended now to allow time-stamp-format to change in the future to be compatible with format-time-string. The new forms being recommended now will continue to work then.
See the documentation string for the variable time-stamp-format for details.