Steps to reproduce in creative:
Place fence post
Spawn wolf with spawn egg
Tame wolf with bone
Use lead to attach wolf to post
Right-click fence post (or move fence post using a piston) to release wolf
Spawn cow
Attack cow with empty hand
Expected behavior:
Wolf attacks cow, and follows the cow if/when it runs away.
Observed behavior:
Wolf will not attack the cow unless it is within the region the wolf could reach while leashed.
Also, the wolf will not wander from that area, but can follow the player via teleportation.
Can confirm, and works for 1.17 pre-release 3
Another observation that I have made is that when you attack a mob outside of the reach of the wolf, then bring it closer, the wolf will not attack it even though the wolf can clearly reach it.