This has been happening on my server ever since the upgrade to 1.17 on and off. I have hosted on several different connections and configurations of hardware, all of which don't seem to affect the issue consistently, therefor I doubt it's an issue on my part. Servers for 1.16.x all worked and continue to work fine. What I find actually allows people to connect is setting the server view distance to 4 chunks. Any more than that and it's back to falling. Furthermore, I can confirm this issue still exists in release 1.18.
This issue is clearly important to the community given the overwhelming support for it to be reopened. Please consider reopening it. Regardless of official support for this issue, I'd like to inform those reading that there are mods which address it for the fabric loader, which run completely client side.