Adjustments have been made to the content and drop rates of treasure coffers in the following dungeons:
The Drowned City of Skalla
Hells' Lid
The Fractal Continuum (Hard)

I have no idea what this means.

Does it mean that the chests drop even more loot then they did before, or does it mean that it drops armor all the time with the random bundle of crystals/materials to make it better than it previously was?

I hope its the former cause getting only one piece of armor from a chest is random, and it being the piece that I need to complete a set so my ilevel increases would be nice.