It was a sideeffect of the new hinge of the mainframe (not something designed on purpose) and is located on the mainframe. You won't notice a difference in handling or riding.

I would always prefer an MK3 over an MK2 as it has been enhanced massively but not obviously. I'd prefer a MK4 over a MK3 in general for one reason: The new hinge on the main frame. The old frames had some breakages around the hinge and the spare part (front part of the main frame) is no longer available. However: It is only a fraction of bikes that break (but they still do until today) and there's no clear pattern which bikes do or may brake. It may have to do something with load, miles, riding-style, a bad day of the welder in the factory, a batch of tubes at the lower end of acceptable quality or any combination of any of those or other possible root causes. Fact is: No such breakages with the MK4. If a bike with the short wheelbase breaks it is a total loss (though selling it as spares still brings in some cash).

Brompton follows a politics of continuous improvement from the beginning. Each model year there have been some enhancements in parts and quality - since 1988. This makes 30 years of small enhancements since invention of the MK2 and 18 since the MK3. Sometimes obvious ones like hub-dynamos, gear-options or lately the rear carrier, sometimes more subtle ones like higher quality bolts, stronger rims, the front-wheel hook or better roller wheels. Many really make a real difference in daily life as i.e. the 2013 brake-levers or the locking mechanism for the rear frame (standard from 2008 on). Thus the younger a Brompton is the better it is. You can retrofit almost everything to older bikes (backwards compatibility is another core point of Brompton) but this quickly adds up on cost. Therefore it may be worth upgrading some bits of an older bike that you already have but as the prices for used Bromptons are pretty high financially and rationally it makes often more sense to sell the older bike and buy a newer one if you want to upgrade a lot. Buying an old clunker with the intention to upgrade it to today's standards makes no sense at all - you'd end up spending more than a new Brompton costs and still have an old bike and some differences to newer models.

Still an old Brompton is as much fun to ride and there's no real need to upgrade if you already own a MK3 and are happy with it. The things I would recommend upgrading are the brake levers, the rear-frame latch, the roller wheels and - if desired - the hub-dynamo lighting. However: Things like the different handlebars or the two-speed have only been available during the MK4 period (retrofitting is of course possible, but pricey). The length of the frame respectively the slightly longer wheel base does not make a noticable difference.

So if you want to buy a Brompton buy a young one as it is simply the better deal. If you have an old one it depends from your taste and needs if an upgrade is worth it.