i'm unsure if it's only spectator mode that is affected by it but i tried in creative mode and everything worked fine. I've tested it several times so i can confirm that it wasn't a one time thing. The game isn't slow it just stops rendering unrendered chunks.
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It's a snapshot so it will have some bug! But don't worry, Mojang will fix this in the 1.18 official!
What is the spectators generate chunks game rule set to?