The second edition text elaborated on Gollum’s long history with the ring and its status as a ring of power. Rationally, Gollum demands the answer to what’s in Bilbo’s pocket and furiously chases him down, causing Bilbo to accidentally put on the ring while stumbling and, in turn, discover its power. Through Gollum’s rantings, we discover his desperate, enraged, and pitiable nature. Bilbo invisibly tracks him through the tunnels and ultimately chooses a daring leap over Gollum to escape rather than stabbing the poor creature with his sword.
It was a drastic change with deeper characterization, improved storytelling beats, and higher stakes.
Tolkien’s submission of this new Hobbit content took place back in 1947 when he was in the midst of working on The Lord of the Rings. By then he had fleshed out the central importance of the One Ring and developed Gollum’s dependence on it. He took what he had newly established and applied it to Bilbo and Gollum’s encounter, submitting the revised chapter to his publisher alongside other notes and material for The Hobbit.
Tolkien received word that Allen & Unwin would address the corrections he made, but they made no mention of the drastic changes to Chapter Five.