It seems that the origin point of the leads used by the wandering trader to attach to its llamas has fixed to a point in space that is not the trader. As the trader moves around, the llamas still follow, however the lead's origin does not change, and the llamas stay attached, stretching the leads seemingly to any distance (see attached images).

I am not certain what triggered this. One minute all seemed normal, and when I saw the trader again there was the issue. And I therefore do not know of any steps one can take to replicate this. However it does seem to be fixed by reloading the game.