Virtual reality (VR) exergames are increasingly used to support user motivation and retention. Similarly, virtual augmentation---virtually adjusting players' abilities in virtual environments---of user abilities can elicit motivation and empowerment. However, research on augmented VR interaction with older adults is limited. We designed an exergame for older adults with augmented interaction, specifically augmented locomotion and augmented reachable range for object manipulation. In two user studies, we explored how augmentation affects player experience and performance with younger adults (aged 18--35 years, N=29) and older adults (aged 69--89 years, N=24), respectively. Our study with younger adults indicates that augmentation (primarily locomotion) significantly contributed to intrinsic motivation, physical activity enjoyment, and game performance without increasing cybersickness or diminishing physical activity. However, augmentation did not yield the same effects for older adults, and even decreased physical activity. Our work suggests exploration of different augmented interaction types and carefully considering age group differences when implementing augmented interaction in VR exergames.