http://example.com/en-gb: For English-speaking users in the UK http://example.com/en-us: For English-speaking users in the USA http://example.com/en-au: For English-speaking users in Australia http://example.com/: The homepage shows users a country selector and is the default page for users worldwide
In this case, the webmaster can annotate this cluster of pages using rel-alternate-hreflang using Sitemaps or using HTML link tags like this:
The new x-default hreflang attribute value signals to our algorithms that this page doesnít target any specific language or locale and is the default page when no other page is better suited. For example, it would be the page our algorithms try to show French-speaking searchers worldwide or English-speaking searchers on google.ca.
The same annotation applies for homepages that dynamically alter their contents based on a userís perceived geolocation or the Accept-Language headers. The x-default hreflang value signals to our algorithms that such a page doesnít target a specific language or locale.
Otherwise, by setting up hreflang="x-default" on English home page (which has language selections) will result in Austrans being served home page in English instead of in German... and then bye-bye CTR...
Judging by the thread at google, you are not the only person to wonder. But the newly posted change applies only to the specific term "x-default". Other stuff involving "hreflang" was addressed earlier [support.google.com].
If you have several alternate URLs targeted at users with the same language but in different locales, it's a good idea to provide a generic URL for geographically unspecified users.
So if your assorted Germans all end up on the same page, there's no need to specify a region in the first place. Just 'hreflang="de"'. The region is always optional.