There is a problem with a certain range of a render distance. This happens between 6 chunks and 12 chunks, It also happens on 18 chunks.

What should happen is that the chunks turn up to a render distance that i can see far enough without losing too many frames.

What DOES happen is that turning to my usual Render Distance of 7 chunks from my no-lag 2 chunks would produce an odd error that would render loading chunks over a large area of chunks. The terrain collision is still normal but due to this it is impossible to tell where you are. Different parts of the world are affected with different render distances.

Steps To Replicate

1. Turn your Render Distance to 2 chunks
2. Start a brand new world. Have cheats enabled.
3. Whichever direction you are facing when you spawn, head ~1000 blocks in that direction, and explore to the left of you for about 300 blocks after going that far.
4.Turn your Render Distance straight up to 5, and explore some more (Load more chunks!)
5. Turn your render distance up to anywhere between 6-12 chunks, and the problem should occur if you are in the right general area.

Screenshots: There are many...
World: Go to -102 94 255 (XYZ) and go from there.