In contrast to Guntram Blohm, I am able to reproduce this issue locally on a completely vanilla server by using toxiproxy to simulate a bad network connection.
For server view distance 12:
At 100kb/s I am no longer able to login or travel from the nether to the overworld without timing out. (Both still working at 150kb/s).
Expected behavior: lowering the client view distance should reduce the amount of data sent from the server to the client, allowing players with slower connections to participate.
This is an issue on our SMP as well (1.18.1). We needed to reduce server view distance for some players to be able to connect at all. Their client view distance was set to low already, but not taken into account.
Huh. I searched for it, but obviously overlooked it. Sorry.
Confirmed in 1.19. The proposed solution will also fix at least some of the problems of MC-228420.