With config.generators becomes a way to configure generators
for current instance only. For example:

module Blog
  class Engine < Rails::Engine
    config.generators do |g|
      g.orm :active_record
    end

    config.app_generators do |g|
      g.test_framework :rspec
    end
  end
end

such definition sets :active_record as orm for engine and :rspec
as test_framework for application. The values set with app_generators
can be overwritten in application using config.generators as you would
normally do:

module MyApp
  class Application < Rails::Application
    config.generators do |g|
      g.test_framework :test_unit
    end
  end
end