It occurs even in 3rd person view and not just in some biomes, as far as I can tell, it occurs in all nether biomes. When you partially put your view into the lava, the lava is perfectly see through. It can be used to easily find ancient debris under large lava lakes. On a side note, I feel like potion of night vision (or maybe a new type of potion) should allow us to see better through lava. I also genuinely think there should be some translucency to lava when seen externally, a very slight amount perhaps, just to give the player a better idea of their surroundings, and reduce claustrophobia in lava dense spots in the nether.
Just experienced the same bug, cannot get the entity to start bobbing again no matter what I try. Once I kill the old entity and spawn in a new one, the new one starts to bob.