Severe Client/Server De-Sync (Chunk-Based)

Partner Rank: 1
Verification Builds: V1.7.0_RC4 (1217941)
Summary: Extremely odd desyncy things happening in a particular chunk area (infected area) until the area is reloaded.
Description: We have players progress through a level. Once they reach a certain point they enter a group of chunks where very bizarre things begin to happen. There seems to be some kind of client desync. The infected area is bound by chunks between (-5007, -1039) and (-4912, -864). We have observed the following and more:
1. Entities don't appear for some players until the mobs wander out of the infected area.
2. Players click on the blocks to break them and instead of doing a break animation it just vanishes.
3. Pick block doesn't work in these chunks
4. Players not seeing the same thing; some see mobs in the infected area and others do not.
5. All kinds of oddness.

All of this goes away when the player reloads this area either by relogging or leaving that area and coming back.

If you would like a copy of the world in question where you can see this issue for yourself ask for a copy from myself or TheRedstoneScientist in slack.

Repro Steps: (visualized here: https://streamable.com/j5ml0)
1. Download the world from the link we give you.
2. Use the command: /setblock -5992 2 -1008 redstone_block
3. Hop off the roof and follow the path to the bridge. After crossing the bridge, proceed a bit further.
4. Begin holding right-click and blocks will begin disappearing. This is the easiest behavior to observe, but further testing will reveal other oddities as described above.
5. If you'd like, view chunk boundaries to see the exact cutoff points.
6. Relog. The issues disappear. When you load back in there's a bunch of new entities that were spawned in from before, but were invisible the whole time.

Observed Results: Strange strange behavior in infected chunks until relogging.
Expected Results: Summoned entities appear, blocks are normal, etc.
Screenshots/Attachments:
https://streamable.com/j5ml0
https://youtu.be/ZSrDMLyaGIw