This has no effects on regular survival worlds. If you turn on caves and cliffs and other sort of cheats sliders it affects those versions. If the host spawns in mobs and then walks away a certain distance all the mobs that are spawned in freeze up, even if there's another player that didn't spawn them in nearby. You can test it out yourself. This is for multi-player.
Related issues
Comments

Thank you for your report!
We're tracking this issue in MCPE-147391, so this ticket is being resolved and linked as a duplicate.
If you would like to add a vote and any extra information to the main ticket it would be appreciated.
If you haven't already, you might like to make use of the search feature to see if the issue has already been mentioned.
Quick Links:
📓 Bug Tracker Guidelines – 💬 Community Support – 📧 Mojang Support
📓 Project Summary – ✍️ Feedback and Suggestions – 📖 Game Wiki