Mobs spawn but in such low numbers you have to hunt for 15+ mins in an unlit open field to find any hostile mobs. Fish and squids are also no longer spawning. In the picture attached the pond had 20+ squids spawning in it constantly, until server was updated to 1.13 pre3. I could walk away and come back and the squids would be repopulated. The server world was created in pre1 and mobs were spawning like normal until updated to pre3.