Level 50 veteran level 1 character, play the other alliance faction questlines, is character or content scaled?

In my question here, about there being separate areas for the three alliances (factions) in Elder Scrolls Online, I was told, and I've emphasized what is relevant for this question:

You are correct, the only time you will "meet" other players is in Cyrodiil. Once you have completed the main story and reached Veteran rank 1, you will be given the option to play the Daggerfall covenant or Alderi Dominion quest lines. Even then you will be phased with other Ebonheart Pact players and see no other factions.

When doing this, will I:

• Play as level 50 character, in areas appropriate for level 1-3 players (to begin with), containing level 1-3 quests, mobs, and rewards? Meaning that I can probably just shake my fist to have mobs die, and the rewards will only give me a few gold?
• Play as level 50 character, in the same areas that level 1-3 of those other alliances have played, but with the quests, mobs, and rewards, scaled to level 50? In other words, here I'll have a chance to get gear, money, xp rewards, that is fit for my level 50 character?
• Play as level 1 (again) in those quest-lines, levelling up as normal (this scenario is unlikely, but I added it for completeness)

In other words, what exactly do I get out of this, compared to just starting a new character in another alliance and levelling it up as normal?

It appears I have gone and created more questions then I have answered.

First of there are 3 ways to level up once you hit Veteran Ranks; Veteran Overwold zones (questing), Veteran Dungeons (same dungeons you did while leveling but much harder) and PVP.

The short answer is more like your 3rd option. Not in the way you described it though. Level 50 A.K.A. Veteran Rank 1 is when you are sent to the Veteran Overworld Zone, which is the Veteran questing area where you do the questlines of the other two factions. Only in these areas everything is Veteran Rank. Veteran NPCs, Veteran quests, Veteran Rewards, Veteran Gear, Veteran level resources, you name it, its Veteran.

If you so choose to go back to your home faction questing area the highest loot you will find is level 50. Nothing will be Veteran except for the occasional resource you might find in coldharbour that lets you make Veteran gear. And yes you can go back simply by teleporting.

Also the first time you do this, (speculation at this point) the questing will only put you between veteran 4-6 which you will then start the next factions questing zone. The idea behind Veteran ranks is to take a very long time.

Alright time for my long answer full of spoilers and such (this is my attempt at not causing more confusion)

So you have finished Coldharbour, foiled Molag'Bal's plot of destroying Nirn. You have just hit level 50 (AKA Veteran rank 1(hopefully, those that don't have to grind to 50 cringe)) Now you are being summoned to the harborage to fight molag'bal. Once defeating him you are asked if you wish to see what it would be like if you had washed up on a different shore, saved by a different faction. If you accept, you will start your journey through whatever faction the game chooses for you. I am unsure if it is random or if there is a linear path of which one is next. You start out just like if you had started out making a new character for a seperate faction, except you are still veteran rank 1 and still have all your skills and gear. Also everything is veteran as well as mobs which by the way are much harder to kill. Traps are just as deadly, one misstep will hurt, two missteps will be deadly. So if you couldn't help yourself and read this part of the answer enjoy veteran content its way more challenging and fun then normal mode.