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That new, improved highway was called the New Amwell Road!
The 1860 Farm Map of Hillsboro shows both routes. I have traced the original Amwell Road in red, and the New Amwell Road in blue.
It is easy to see the advantages the new route had over the older in 1860. It was a more direct route, on a newer road, and only required a 2/10 of a mile jog at Beekman Lane to get back on Amwell Road.
So why didn't the New Amwell Road become the dominant East-West traverse through Hillsborough? Why didn't it become County Route 514? My guess is that it came down to business. We know Woods Tavern was on this stretch of Amwell Road, as were, undoubtedly, other businesses. Ultimately, it was the original Amwell Road that was continually improved and upgraded over the years, while New Amwell lagged behind.
This is conjecture, of course, but if any readers have other information or theories about Hillsborough's original bypass, I'd love to hear them.
[The 1860 New Amwell Road consisted of today's New Amwell Road and Hamilton Road. Before the construction of Route 206 split the road in two, this was one continuous route.]