[SPOILERS] The Shadow Realm is, in fact, still inside the Lands Between.

So we all thought that this island of clouds was the possible location for the DLC up until it was shown to be in a "different" realm, however...

The Shadow Realm appears to be at the exact center of TLB. Meaning that, even though the main map wasn't changed to reflect it, these lands are probably located under that shroud of clouds, obscured by magic.