A lot of people here seem to be bent on ignoring that a lot of trouble in OTL arose because the idea was implemented poorly, not because it was implemented in the first place. There are some areas where you will see trouble, particularly the Hungarian exclave in Romania and in (what was in OTL) Yugoslavia, because it's hard to get those areas "right" (but they were very problematic long before Wilson's plan). As much as I detest Wilson, there is a very dumb tendency to dismiss his ideas as being the product of this "old racist", with the implication that his racism means he cannot possibly ever have had a single valid idea. That's logically incoherent.
The truth is that if you'd altered the Hungarian borders to include the clear Hungarian-majority areas around OTL Hungary, there would be far, far less revanchism. Why? Because the no-longer-Hungarian regions would all be evidently not Hungarian. The whole myth that "Hungary was carved up" thrived on the fact that there were indeed an awaful lot of Hungarians outside Hungary afterwards. If that's not the case, both the validity and the support for irridentism woul be vastly reduced. (The exclave could theoretically be a separate Hungarian country, which should be allowed to unify with Hungary via a pleibiscite if it wishes. Free civilian travel between the two Hungarian states should be guaranteed by treaty.)
Likewise, Germany: if we go by ethnic majority, Poland doesn't get the coastline, and all of Germany stays contiguous. The whole excuse for war with Poland is gone. There are no "germans under the Polish yoke!!!", since Poland contains no (or very, very few) Germans. Same goes for Czechoslovakia. There won't be a Czechoslovakia. Those will be two countries. And while the Czech state will be small, since the Sudetenland goes to a united Germany (also including Austria), there will be no real reason for Germany to want to invade Czechia. All the irridentist anger that so fuelled Hitler will be totally gone in this ATL. If the idea is really applied, Germany even gains South Tyrol and gets to keep over half of Elsaß-Lothringen! What "wrongs" will Hitler have to "right" via brutal force, then? For a lot of Germans, there would be far less reason to ever vote for him.
And sure, the whole primise is hypocritical since the winners of the war surely do not intend to apply it to themselves (or to their colonies), but has "this is hypocritical" ever been a reason not to do a thing, in all of history? The self-determination of peoples was not a stupid idea, it was one of the best ideas in political history, it remains morally sound, and if it had been applied more honestly, it would have been a great step towards preventing World War II and all Nazi atrocities.