When a mob gets close, they disappear. They can still attack me. I think if I land a lucky hit they turn visible, although it could be that they were randomly reappearing and that allowed me to make contact in that instant.
Mob drops also disappear as I approach, and don't get picked up. I can hear some pinging sounds of XP being picked up, but when I move away there are still some XP orbs lying around.
There was an update yesterday, and things seemed fine, but today this bug randomly appeared.