View distance affects mob spawning

Reported on forum: http://www.minecraftforum.net/topic/1541173-java-memory-and-minecraft/#entry19026273

Apparently, the server "view distance" setting, which affects how many chunks are sent to the client for rendering, also affects mob spawns.

What I expected: Just like in single player, under normal circumstances the server would have radius 9 chunks loaded (radius 2= tiny render distance, radius 4=short, radius 8=normal, and load a 9th chunk out so that block ticks can affect stuff into that next chunk), and would have game effects and mobs working in that range, regardless of how many chunks were being sent to the client. Equally, if I had view distance of 15, then my clients can use "far", and things would still behave normally.

While working on server performance, memory/GC tuning, etc, I had a typo recommendation of 7 chunks instead of 9. And I got a response from someone that this severely affected mob spawns.

What I see as the bug: View range – chunks sent from server to client for display – should be independent of game effects – effects are within 9 chunks, as mobs should despawn if loaded and more than 127 from a player, and a block 8 chunks away might tick and update into that 9th chunk. This should hold true whether only 4 chunks are sent to clients (overloaded network upload speed), or 15 chunks (lots of memory, bandwidth, and far vision support)