When I sign this transaction, then the BTC I am NOT moving will be sent to a new address in Armory.
No. As long as the transaction is not broadcasted to the network (and receive confirmation), you can send
those BTC to a different address.
Nah. HD wallet automatically generate new address and move wallet balance inside the wallet to new address generated when a transaction occur (send out).
My question; where does this new address come from? I presume it is generated by Armory, but how?
Addresses are derived from a
BIG Number, which is randomly generated.
That's not correct because every single addresses reproduced or generated by the wallet come from the master seed key.
I believe the HeRetiK have provide the OP the right answer before.