Count Sacke

I would also like to note that the entity doesn't even need to be teleported into unloaded chunks. If the displacement is large enough, the spectating player's position doesn't update to the entity's new position (or any new positions after that until exiting the entity being spectated).

Still an issue in 1.18.2

Still an issue in 1.16.5

As of 1.15, the player now teleports to the location, however, none of the chunks load even with the gamerule spectatorsGenerateChunks being true. There is also now something new, when you teleport a long distance away, the entity now disappears; the entity is still there and you can still hear it, but it's invisible (I believe this will only happen if you teleport into new chunks for the first time though I am not 100% sure); only when you exit and reopen the world will the entity appear again.