I run a 1.16.4 Minecraft server that runs the vanilla server jar, although it should be noted that it has run on Fabric in the past for optimization-focused mods such as Lithium, Phosphor, and Carpet Mod. The server files are over 500GB in size and it has existed since the release of version 1.9. When a player enters particular chunks, the server seems to hang on one tick until it is caught by the watchdog. I have attached an obfuscated crash log below. Here is a pastebin link to a similar crash log that has been deobfuscated by an individual from my server community: https://pastebin.com/8J0WSWYj. After the server crashes, loaded chunks at the time of crash seem to revert to the last save state available. When turning off the watchdog, the server just indefinitely hangs; the longest I saw before force killing was maybe 30-60 minutes. This has been plaguing my server and has caused a lot of stress for me personally.

Deobfuscated Crash Report uploaded as output.txt