If you have configured that tailscale node as Subnet Router or Exit Node then yes, that is supposed to happen.
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Awesome. Well that's even better than using the 100.xxx addresses
Depending on how you set up your on-LAN tailscale hosts, you may have included --advertise-routes=<your lan CIDR>
and then I think you need to --accept-routes
on other clients for them to actually set up the local routes that use the wireguard connection, but that would likely explain the behavior you're seeing unless the behavior was updated to make this automatic.
Are you talking about addresses like 192.168.x.x? Do you have subnet routing enabled in Tailscale?