When the looking inside a player/mob's hitbox, game is insanely laggy. Moving the camera is laggy, and when the inventory is opened, it is hard to control the cursor. Entering in third person perspective while inside another player/mob's hitbox moves the hitbox out of view and gameplay becomes normal again. Switching back into first person resumes the issue.
This does not seem to be affecting all players though. When I played with someone else, they didn't find it laggy, but I did.