Mobs not moving correctly on servers (Teleporting around)

Game mode: [Online]
Problem: [Bug]
Region: [N/A]

EDIT IMPORTANT UPDATE: The problem solved itself on our own server after another server restart. The problem persists however on the other private servers I tried.

Problem description: It seems like mob locations are not being updated client side (desync issue). I can see all the mobs. I can see their animations real-time. They do however not move as they should (They get “stuck”/teleport around).

Example: Approach a random mob that will flee when attacked. It is not moving for me, yet has the walking animation. It has the running animation when I attack it. I can hit it and damage it, and even kill it where I see it, even though others will see it run off, with me hitting empty air. Upon death the body will appear for me at the location it SHOULD be, not where I killed it client side. Mobs locations DO update, but very slowly, causing mobs to teleport around. The location updates can be several seconds apart.

Information to note:

  • Single player is not affected.
  • I already fiddled with game settings on my side, just to make sure it is not some GFX issue.
  • I already verified my game files
  • We have 5 rigs in the house playing it, none of the others have the problem. (Yes, it happens even when I am the only one active on the net.)
  • We play on a private rented server. None of the others have reported this issue.
  • The problem is there, whether I am online with just one other person on the server, or there is 10 other people playing.
  • I cannot test it on official servers as there are none that I can find that I meet the minimum ping for. (I live in South Africa and go just over the EU limit of 140).
  • I did test it on another private server. Same issue immediately.
  • Everything ran smoothly for several days, this started yesterday.

I know this is a tough problem, as you cannot fix what you cannot see, and I don’t know how to reproduce the problem on another rig. Just hoping someone else has had the problem, and figured out a way to solve it.

Steps on how to reproduce issue:
No clue how to make it happen for anyone else. As for me, just walk up to a mob while logged into a server.