create a fresh server, move your world file into that server. should fix it.
I found a fix, start with a fresh install of the server and replace the world file with the one you would like to keep, then start the server. worked for me.
Update: It seems to be only overworld spawning that is not working. In the nether, mobs spawn as they should except ghast spawns are not exclusive to the soul sand valley biome and piglins seem to not spawn except for in bastions
I have also been experiencing this bug, no mobs at all are spawning other than piglins and zombie piglins in the Nether (there are no fish or drowned in the ocean biomes for example). I have cycled the difficulty, restarted the server and ran the command "/gamerule doMobSpawning true" just to make sure and still have yet to see a single hostile or friendly mob spawn. I am running BDS 1.16.0.2 on Cent OS with 5gb of ram. All I did was update the server, join the game and the bug seemed to happen. Even with no mobs within the ticking distance of the player, no mobs spawn.
@IonicEcko yes it is run on Cent OS
If you have mending on your armor, the xp will be divided between your armor pieces and your xp bar.