Entities get stuck in the void when render distance is below 12

The bug

Entities get stuck in the void when the render distance is below 12 chunks.

Steps to reproduce

1. Set your render distance below 12 chunks
2. Run the following command to summon an entity over the void

   /summon villager ~ ~ ~ {CustomName:"{\"text\":\"MC-145262\"}"}

3. Run the following command to find the entity

   /say @e[name=MC-145262]

   → Notice the entity still exists