The bug
When an entity emits particles (death, explosion...) the particles don't care about the entity distance limit.
How to reproduce
Set the entity distance limit to 50% and chunk render as low as possible (min 4 because of fog)
Use
/kill @e[type=!player]
→ ❌ Then particles of entities far enough to be hidden are rendered
The entity distance depends on the render distance, but not for the entity particles.
With an entity distance of 50 % and a render distance of 32 chunks, the distance for entities and particles entity is the same (5 chunks)
And with a lower render distance,
→ ✔ the distance for entities is lower
→ ❌ the distance for particles stay the same (as having 32 chunks and 50 %)