In a perfect world, any device that advertises absolute x/y axes also advertises the resolution for those axes. Alas, not all of them do. For libinput, this problem is two-fold: parts of the touchscreen API provide data in mm - without knowing the resolution this is a guess at best. But it also matters for touchpads, where a lack of resolution is a lot more common (though the newest generations of major touchpad manufacturers tend to advertise resolutions now).
We have a number of features that rely on the touchpad resolution: from the size of the software button to deciding which type of palm detection we need, it all is calculated based on physical measurements. Until recently, we had code to differentiate between touchpads with resolution and most of the special handling was a matter of magic numbers, usually divided by the diagonal of the touchpad in device units. This made code maintenance more difficult - without testing each device, behaviour could not be guaranteed.
With libinput 0.20, we now got rid of this special handling and instead require the touchpads to advertise resolutions. This requires manual intervention, so we're trying to fix this in multiple places, depending on the confidence of the data. We have hwdb entries for the bcm5974 (Apple) touchpads and the Chromebook Pixel. For Elantech touchpads, a kernel patch is currently waiting for merging. For ALPS touchpads, we ship size hints with libinput's hwdb. If all that fails, we fall back to a default touchpad size of 69x55mm. 
All this affects users in two ways: one is that you may notice a slightly different behaviour of your touchpad now. The software-buttons may be bigger or smaller than before, pointer acceleration may be slightly different, etc. Shouldn't be too bad, but you may just notice it. The second noticeable change is that libinput will now log when it falls back to the default size. If you notice a message like that in your log, please file a bug and attach the output of evemu-describe and the physical dimensions of your touchpad. Once we have that information, we can add it to the right place and make sure that everyone else with that touchpad gets the right settings out of the box.
 The default size was chosen because it's close enough to what old touchpads used to be, and those are most likely to lack resolution values. This size may change over time as we get better data.