It's only active at the edge. There might be edge lag, but not much else.
To be at a representative scale it would have to be generating millions and millions of Z-levels and close to infinite tiles on the X and Y axis.
According to the wiki, a Large world is 257*257 region tiles. A region tile consists of 16*16 local area blocks, and each local area block of 48*48 tiles each.
If we crunch the number, we learn that a large world is (48*48)*(16*16)*(257*257), or 38 957 285 376 tiles in total.
A tile, by the way, is according to the projectile physics 2m*2m, or 4m
2.
So the total area of a large world is... 155,829,141,504 m
2, or to use a more proper unit, 155,829.141,504 km
2.
This means a large Dwarf Fortress world, with one predominant continent, can be compared with the island of Ireland, and its surrounding sea, as it is 84,421 km
2, and DF continents tend to take up a bit more than half of the world's area. The Earth is way up there, with its surface area of 510,072,000 km
2, about 3273 times that of a large DF world. If we consider a quadratic DF world as tall as it is wide, and with the surface area of Earth, it would have to be roughly 2746*2746 region tiles.
I'm not sure what to make of these numbers, but I figured they would be nice to have here.