Occasionally while building up a pillar, player takes damage out of nowhere when jumping on a pillar, appears to be based of the height of the pillar as I've only noticed about a heart or two of damage, while my friend who owns the realm died a few times from it while building very tall structures.

There have been no mobs around and no starvation occurring when the damage is given. My guess is the game sees the fall from a high Y coordinate and assumes the player is falling from a great height despite the closest block being directly below, or the player is close enough to the edge of the top of the pillar that the game thinks the player is falling to the ground below it.