The 'expanded' linked records feature is enabled by default if the linked field has a form (allows expanding/editing records). There's no new option for it in the settings.
You can select which fields to be previewed on the linked records by changing the order of the fields in the child form. Whichever fields you move to be in the top 3 in the child form, they'll be shown on the outside of the record.
Showing thumbnails
If the linked form includes an attachment field, the first image will be shown as well.
⚠️ Heads up
Note that the following fields are skipped and can't be included in the preview:
Linked records fields
Lookup fields that contain linked records
Conditional fields