Still affecting 1.19
I am also having this issue. We thought it was from people not picking up their xp after trading, as it gets stuck behind their workstations, but this doesn't seem to be this issue.
Have you placed down a bed near them?
I am also having this issue on my switch. The only way to fix it is to close the software. Then it tell you an error occurred. Booting up the game again sometimes make it happen again when you try to access your worlds.
The realm is in 1.16.5 where as my switch has updated itself to 1.16.1 just like OP has said
Added some pictures as I am having the same issue
I have been having this issue on my 1.19.4 Hardcore world. Looking over a map of the area shows massive patches of dirt blocks from sheep eating the grass, even though the area is 800+ blocks away.
I have been going on slaughter sprees around my world to get rid of the sheep and stop it from causing issues with my performance
Here is a link to a clip from my twitch stream from yesterday where you can see the patches of grass that have turned to dirt outside of my loaded area. This is where sheep have been eating the grass even though the area is not loaded.