Many servers offer flying around in survival. Many players have begun using this to fly leashed animals around. The problem is that they bounce up and down, creating Portal-esque momentum generation. This causes the mob to die the moment it hits the ground, requiring you to land in water to prevent deaths. Even worse, the leash breaks all the time, causing more problems. In order to fix this, fall damage needs to be disabled for mobs currently or recently put on a leash.
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Is this still a concern in the current Minecraft version? If so, please update the affected versions in order to best aid Mojang ensuring bugs are still valid in the latest releases/pre-releases.
Yes, the mobs still accumulate fall damage when flying with leads. And yes they still bounce up and down as if the lead is elastic. (1.6.2)
Minecraft isn't built for flying mobs; the Bat took months of development.
Additionally, leashes do not stretch otherwise they would be useless for tying mobs to posts.