This is pure speculation (no harm in that, it's fun!) but I think this might be for an IP-based attraction.
The footprint for the attraction is large (probably as large as the Dungeon and Burger Kitchen combined) but its location is awkward. Realistically, the entrance and queue line need to be situated in what is currently WoDW but thematically, that area is already messy. As others here have pointed out already, WoDW has remnants of CCL theming, the exterior of the Dungeons and also light-touch pieces of theming like the pile of books. Hosting another attraction - especially a major one that will draw in crowds - with another theme will make the area feel really incoherent. And there's no way they'd drop big money on another dark ride themed around David Walliams, the IP just isn't big enough.
To remedy this, they could retheme the entire area - from Burger Kitchen through to the Driving School - and tie it all together with this new attraction. This would be a significant investment, for sure, but not crippling - most attractions there are screen-based or only lightly themed. I always felt that WoDW was done on the cheap precisely because it was a stop-gap that would be overhauled within the short-term future. While AT probably wouldn't tear up the WoDW theme after just 2 years for something they've cooked up in-house, would they do it for a big, lucrative IP? Almost definitely.
My gut says this could be LEGO-themed - tried, tested, already affiliated with Merlin, easily introduced. The new attraction could be some kind of dark ride like their Ninjago or Factory Adventure Ride, with the rest of the land LEGO-fied. It would be straightforward to do this with the 4D cinema, driving school, etc. It would also be cost efficient, because its a recycling of ideas and technologies that have been used in other attractions.
I'm going overboard with the speculation now, but if the above were true, it could even spell the creation of a "second gate" eventually. This area backs onto Farley Lane, and I think it's even quite close to Alton Station, so it would be quite possible to build another, separate entrance for this land. This would make the loss of the upcharge attraction (Dungeons) more palatable for Merlin. A LEGO or "BBC Studios" park, or something to that effect, could be huge for them.