Instanced hub is a personal home instance where character can connect to one of open-world maps/regions through a portal(i.e. hub to world regions).
Usually features access to stash/character respec/avatar editor, building features, player parties or conferences in a neural space.

This design allows flexibility at adding areas without connecting them, without the region-border problem of multi-region world. Also, it scales better by allowing each region connected to the hub to run on independent server which doesn't know of other regions at all(i.e. regions act as worlds for server).

Instanced dungeons can be considered a variation(with open world region X being the "hub") where each instance runs independently of others(scales better with medium size parties).