Just downloaded the version 2.35 update on PS4 and still game breaking lag. This is now the 4th straight day that players have been locked out of their own worlds, unable to play Minecraft because the game no longer functions. I know Mojang has people working on this by now but it's just mind boggling that they would release an update that breaks the entire game. How does that get through testing completely unnoticed?
I have this exact same issue on PS4, player movement and block interaction do not respond in real time and mobs of all type won't remain loaded.
I tested my PS4 single player world again today. My main building area full of villagers and redstone and other mobs is in the spawn chunks. In that area the game is unplayable. I was able to get hundreds of blocks away from there to a branch mine and there was a huge leap in game quality. It's not totally lag free but close to playable, compared to in the spawn chunks which I went back to and the game didn't even register that my character was in them as I couldn't place or mine blocks and none of the mobs loaded.
There's got to be something connected to the spawn chunks being too full of stuff to load to generate the world properly.