[SOLVED BUT NEEDS TO BE ADDRESSED]
We've discovered, that reducing the server's view distance parameter makes the server stable for all players. Though this isn't a bug and is probably entirely our fault, it is still an issue because it makes the server unplayable and there is no game/server-side indication or warning that even hints toward fixing it. From my research I've found multiple events in the past 5 years where people experienced this but none really explained why it occurs or how to fix it.
I highly recommend Mojang look into this edge case regardless. I would suggest having the server print an informational warning when a player repeatedly attempts to join and times out. Currently neither server nor client provides any form of diagnosis or even acknowledgement of this problem.
[ISSUE]
This issue makes some servers unplayable!!!
What happens: Something on either end cuts off the connection before the player can be sent all of their surrounding chunks when loading.
Solution: The solution is to reduce the server's internal view distance, this means there is less to send and less of a chance for the player to be cut off.
This issue is randomly reoccurring and affects all remote players of the server. If this isn't a bug then it is still a problem worthy of looking into as it makes the game literally unplayable in some cases. Players will repeatedly fail to join with not enough information on either end to diagnose why.
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No, I do not have the information from my player's end. However I did notice that this still occurs in 1.13 and I have attempted to update this report.
Something new did occour though, the first time it occured the server said:
[14:47:54] [Server thread/WARN]: handleDisconnection() called twice
We have solved the issue and I have updated the description to reflect that.
The issue is not a bug may still require looking into in order to prevent it from reoccurring (as well as preventing more bug reports on the same issue).
Did you optimize the server world?
https://twitter.com/Dinnerbone/status/1019633458635829254
Yes, we optimized the world for the new update. However the issue occurs on both 1.12.2 and 1.13 before and after optimization.
Do you have information (log file) what's happened on player's end?