Entitles, Blocks, Items and Names flipped with empty hand

When another player is holding something in their hot-bar Entities, Blocks, Items and Names appear normally as expected (Picture 2). When the other player has a empty had then Entities, Blocks, Items and Names move, hover and flip (Picture 1). For example in Picture 1 there is a sheep floating in the distance and flipped as if it has been named 'Grumm' or 'Dinnerbone'