I started a new world to play with my friend who has an Ipad air. We played for about 3 minutes and I walked up to a villager that disappeared and later came back. Then I was giving my Friend some tools and when ever someone walked up to them they would disappear and you couldn't pick them up. So, when ever you walk up to an npc, mob or a dropped item it would disappear and when you walked away it would re-appear.