Can a regio be an entire other world, similar to a plane in D&D (eg, a realm of Ravenloft)? Or is it more like a multilayer overlay of the mundane world (similar to the Upside Down of Stranger Things or the astral plane)? In the latter case, we would see recognizable scenery, but it would be changed somehow (eg, darker and more ominous in an Infernal regio) and this would change as you change regio levels.
Stuff like The Lion, the Witch and the Wardrobe is possible in ArM5 - but it is better to really have an entire world behind the wardrobe, like a part of Faerie or of the Magic Realm.
There are just not enough informations/rules for regios to be that rich - though regios can be as extensive as a SG wishes and can manage.
The four realms are described, more or less exactly like such alternate worlds, just more alien than an alternative universe in mainstream fantasy. My impression, possibly based more on 3ed than 5ed, is that once a regio reaches level 10, it is in fact the realm (Arcadia/Heaven/Hell/Magic Realm). And in the case of Faerie, there are canon rules to play there.
I think that it is important to note that while a regio could be virtually anything, it is not another mundane world. It is heavily shaped by the relevant power, and its presence should be felt. Travelling the regione you move closer to one realm and away from the others.
As to your actual idea and analogy, I should not comment on the feasibility. I do not like the mainstream fantasy multiverse concept, because it tends only to add more random land to explore, without any meaning or coherence. If you know why you want this kind of multiverse, you can almost certainly work it into ArM without breaking it more than mainstream fantasy games already are.
The impression I had was by level 10 you often have Gateways to the Realm in question, not that they were explicably part of that Realm. However, I feel such differences are pedantic and ultimately up to StoryGuide discretion.
I do feel the AM world could do with a bit more "multiverse" a bit less "pocket universe" but that is up to individual taste.
Regios can really be as big or as small as you want them, with whatever kind of connections you'd like to see.
For reference, my impression is formed from a certain table in 4ed, probably identical in 3ed, where level 10 faerie is described simply as Arcadia. Oddly, level 10 divine is not Heaven, just a site of a saint's martyrdom. I must say that since Arcadia is only level 10, also in 5ed, I do struggle with the idea of a level 10 regio or aura on Earth. How do you consolidate it?
I think part of this is the 'Divine trumps everything' approach of 5e. In older editions it felt like the Dominion was only one of several different realms competing for representation on Earth; each realm had strength & weaknesses, and could counter (or be countered by) each of the others. In 5e that is no longer true.
Most Regio are closest to something like the Upside Down. They are recognizable but changed somehow.
A common means that forms a Regio is when a more powerful aura of a different Realm compresses them until they 'bubble' out of the mundane Realm to preserve themselves. Their presence on the mundane will then slowly collapse while it is in its original form in the Regio. So you might find the ruins of an ancient pagan temple (Faerie) in a city (Divine), mostly cannibalized for materials and with new homes build on top of it. But in the Regio the temple is whole and in all its former glory.
Another means of forming (or expanding) a Regio is through activities which cause a surge in its power and potentially cause it to 'crack' or 'fracture'. You can actually find rules for this happening to Magic Aura in RoP:M. It can be done through a great increase in the magical activity or through many different spells, though no matter what it is up to chance. These however are very unpredictable in their formation since somethings movie into the new Regio while others stay on the Mundane. If it happens to a Covenant it might take all of their defenses into the Regio and leave the Magi's labs in the Mundane for example.
Since I have played for half a decade in a Saga that a large portion of the history and some of the game play was related to manipulating a Magic Regio, I made a post talking about some affects of the rules in RoP:M about a year ago.
The "Semita Errabunda" free download on the Ars page has its level 5 in something like a demiplane, but level 1 is very similar to the
external scenery, but influenced by the appearance of
level 5, while level 3 is much like level 5, but influenced
by the external scenery.
So I tend to relate to Roger Zelazny's Amber books, and crossing "shadow" worlds, each one slightly different than the one before. Except your typical Regionne is limited in scope, and walking beyond the physical limits tends to drop you out of the higher regio to either a lower one, or the "real" world.
Sub Rosa has a regio of the giant's living up on a cloud castle/floating island... and there might be a pitch considering this or an adjacent topic waiting in the wings, should we ever get some more books... I'm just saying.
Other opinions may differ however, in regards to an entire other world, the canon suggests there is a faerie world with a faerie aura of 10. I would consider Heaven and Hell aura 10 regiones, however, Canon also strongly suggests going to Heaven or Hell, well, you aren't coming back, so it's a moot point.
It is implied that there may be a magic 10 regione where one might go when final wizard's twilight hits, but I'd consider this concept a "some magi theorise this"; not a "the SG who runs the game has been told by the writers this is how Ars Magica Cosmology" work.
Apart from the top end aura 10 Magic, Faerie, Divine and Infernal places, I'd say do what you want.
Regiones can be large.
If one wanted, one could have a Mythic Greece regione where all the Olympic gods hang out and still mess about with mundanes. Mount Olympus is there and pretty much all of Greece during the "Time of Heroes".
Regiones can be small.
You could have something as small as say a hermit's hut.
I would personally balk at a Divine regione, as I see Divine as order being stamped on the world. Every other aura gets suppressed by Divine. A Divine regio seems too other-worldly for me, too mystical. Infernal regione, for sure. Diabolists want a pocket dimension to hide from prying inquisitors. This is purely personal taste though.
Final Caveat - I have not read every source book out there, and some I've borrowed and read years ago and can't refer to them, so if somewhere there is a canoncial magic 10 regione, oops.
Regiones can be in principle any size, but as mentioned they are connected to the realm they represent. For something like the Lion the Witch and the Wardrobe this need not affect the setting- it could be described as a dive regio where the infernal has sent agents to encroach and try to corrupt it, or a faerie morality play. If you try and expand out to the whole series, where it is definitively defined as a parallel world to earth then its your saga and you can technically do what you want, but at that point you have a lot of questions you need to figure out- like how to get there (traveling through divine regios to enter another world made by God would ft the Chronicles of Narnia explanation) and how the cosmologies of the two worlds connect.
I assume they are referring to the Realm Interaction chart from previous editions, in 4th ed. a) the divine gets hampered by the other realms and b) the chart is a lot flatter where the highest multiplier used for penalties is x3 (Infernal powers in Divine aura) instead of x5 for the same interaction.
I have a counterexample which I believe nicely illustrates a way for divine regiones to exist:
This small church lies in a divine regio where it can only be found by those who either come to with a genuine intent to pray and those who flee persecution because of their religious beliefs. In particular it is completely inaccessible to anyone who might seek it out in order to harm the faithful that shelter there.
The point being that the divine regio protects the faithful from persecution.
Here is the realm interaction chart from 3e. As far as I am aware the caveat that magic which penetrates a Dominion-aligned entities magic resistance doesn't work in cases where 'the being is performing duties assigned by God as part of the Divine Plan' (which, in the case of angels, is close to 100% of the time) is new to 5e.
Reason was the forerunner of Paradox in M:tA. Paradox is pretty much what would happen if the Realm of Reason became the dominate Realm above all others, much the way that Divine is in 5th.
Regiones have long been one of my favorite parts of Ars Magica. Since they do not have to follow the traditional "rules" of the mundane world, you can have all sorts of interesting them happen in them. This makes them great for some truly exotic adventures. People can fly, live on laughter, are unharmed by fire, or time passes at a strange rate are all found in the books. In at least one published instance, a series of them are linked and can be used to travel vast distances. Just remember that if you make one too awesome your PCs might decide to clear it out and move their Covenant into it. There are actually rules in RoP:M for creating one in which people heal faster or are always happy.
I would actually recommend spending some time reading through the section in RoP:M. It is rather difficult to follow and could use a serious edit but it is well worth making the effort to understand.
I ran a story in the crossroads regio from Mythic Places (or more...) once. Why would that regio exist?
It seems to me to exist to provide counsel to travellers who need it. I certainly never thought it could have been created to protect the hermit trapped inside it. The hermit certainly seems to be punished more than protected; he would have been better off in Heaven. Maybe the regio serves as a purgatory, and the hermit will move on as other devout people on the latter day.
IMHO the most plausible answer is that the hermit is a servant, placed there by God, out of reach from curious passers-by, but within reach for those in genuine need. Why would this not be God's way?
P.S. I really do recommend the two Mythic Places from 2ed for regio ideas.