When you diving underwater, and see some entity mob near you (I.e: squid), then swim more far at more than 16 blocks away then it will be disappear.
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I set max render distance is 6 chunk, however any number of render distance still cause disappear entity mob in underwater at 16 blocks away.

Same happens to me while I'm on PC with 30 chunks.

Same here Xbox one my settings is set to 22 chunks and i'm seeing the issue, also outside of water if that counts.

Confirmed on Windows 10 1.2.10.2. Affects other entities including players and falling gravity blocks.
Does this also occur in the latest beta version?

Yes, still in latest version. Current version is 1.2.11
Cleaning up old tickets: This ticket has not been updated recently so is being closed as Cannot Reproduce. If you feel this is still a valid issue then please comment, or create a new ticket following the Issue Guidelines.
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What is your render distance set to? Does changing this affect this issue at all?