In a realm that another player and I play in, when either of us move out of sight from the other (as in far enough to no longer see their player or name tags) and then come back into each others view (can now see their player and name tag) both of our skins reset to "Steve". When we both leave the realm and then log back in, we're now our custom skins again (until we get too far away from each other again). But on our own screens (the start screen and our 3rd person) we're still our own custom skins, but to each other, we are "Steve"