Chunk corruption on BDS 1.16

Users today have been discovering that new chunks loaded since the nether update are generating as pure stone with villages, shipwrecks and the occasional body of water, with the inability to break/place blocks or items and are unable to open the inventory. I've had to set the server to offline until this is resolved as now everyone is fearing active areas of the map will turn to stone or have chunks disappear since the 1.16 update already brought on bizarre lag spikes lasting up to half a minute that didn't occur on 1.14. The attached image is from one of the players showing the bug in action.