Lan does not work properly yet for this version. We tried it with 1.13.2 and a modpack (HermitPack) and it did work there, so the issue is not on our computer(s) and/or network.
I did a search to see if it already was reported, I could not find a report. I am very sorry if I did not see one and this is the second or third report posted!
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It appears to be a game of chance now, the bug happened to me once but then after restarting the joining client everything appears to be normal. Maybe it has to do with spectator mode? I joined in spectator mode the first time, the second time in creative.
Edit: After some research, this bug is related to the gamerule spectatorsGenerateChunks, and not a problem with lan itself. With the gamerule set to true, terrain loads normally in spectator mode, otherwise terrain does not. If the player joins while the rule is set to false, entities may freeze in place from where they were spawned / loaded in at.
This issue appears to be related to MC-138053.
This appears to affect terrain and entity movement. Entities appear in the position they were spawned / were they were when the client connected. Sneaking and damage / death animations will appear, but their positions will not update.