If you set your render distance to a low enough number (It's set to 2 on my screenshot) you can see that entities render before the chunks they are currently in do. These entities will not move or do anything until the chunk they are in is loaded.
Simulation distance does not affect this behaviour.
Steps to reproduce:
- Set your client's render distance to 2, 3 or 4 chunks (The lower this is, the easier it is to reproduce).
- Summon one or more entities in a spot you can see from afar.
- Move away from that spot until you can no longer see the chunk being rendered.
- Slowly move towards that spot, on occasions you'll see how the entity renders before the ground does, resulting in a floating inanimate entity.