Entity interpolation while the game is frozen seems to be broken. Prior to 26.3 Snapshot 9, running /tick step resulted in smooth interpolation, but now it is practically instantaneous. See attached video for a demonstration. (If you download and watch the video on a <=120FPS display, you may notice some visual rebounding in the second half; this also occurs in 26.2 and is tracked in MC-311328.)
Can confirm.