While this does not happen on my solo game, it happens when I am playing with my wife on multiplayer (both if I am the host or she is the host)

Villagers (and Iron Golens) randomly walk around one block into the ground, including children (which is funny since it will be little heads moving through the ground). There is no way to get them out and it seems they pathfind from that depth because they are unable to move across upwards terrain. 

If I break the floor where they are, they will immediately flee to the correct height. 

Since it seems to be "mostly" a visual glitch I will just let them be and they will eventually get out back to normal Y height. 

EDIT: Today I had something extra fun, my wife's cat was walking one block high, it was basically flying lol. On her screen, it was at the correct height, but on my screen it was flying, Also, to clarification, the above mentioned bug where some  villagers/golens walk 1 block sunk in the ground appear to both of us, while this cat bug only appeared to me.