Steps to Produce:

1. Set world simulation distance to 4.
2. Get at least another player or more in the same world.
3. Have all players go to a crowded entity (ex. animals, villagers, chickens).
4. Have the first player stay while the others move at least 200 blocks away from the first player.

Observed Results:

There's a chance that entities near the first player will become frozen in place. Killing frozen entities will not drop XP or provide the Looting III effect. Chances will increase if more than 2 players perform these steps.

The only fix to this issue is by having other players leave the server and join back.

In-game text chat will delay for other players. Paintings will randomly break in an unloaded chunk.

Expected Results:

The first player should not experience entities frozen in place.