I'm running a vanilla, public PvP server. Since 1.8 came out three days ago, I'm dubious to believe that someone has been able to modify their client. Disclaimer: this is a bug report. Not an appeal to get a player punished.

One of my staff members managed to record two players in PvP. In this case, the players involved are "Armored_Maniac" and "Justin526": https://www.youtube.com/watch?v=Bh2XY_sF-QM

0:00 - Justin526's potion effect particles are visible
0:07 - arrow spawns from invisible Armored_Maniac
0:40 - items being throwned from the bugged out, invisible Armored_Maniac (and no potion effect particles)
0:55 - watch chat. My staff member verified the invisibility of the player. Player TIDAG notes that Armored_Maniac is not in the tab list.

Additionally, my staff team was able to verify Justin526 failing to render to clients sometime after.

How is the server software allowed to get into a state where it just forgets to tell the client about an entity? Can anyone shed some light on this long-standing bug? (I've known about it since at least 1.5, but they used to show up in the tab list. Now, how does this even happen?)