It seems that the 1.17 update made this issue occur more often. For me, sometimes only some skins appear as Steve and others will load. Other times it's every player that appear as Steve. On servers with custom entities, those also can appear as Steve. If I have this glitch and I change my skin in game, it won't update my skin for me or other people around me.
Try turning your Anti-Aliasing in video settings down to one. It fixed the input delay for me
Sometimes when I minimize/alt-tab away from Minecraft and then go back into it while in the menus the server captions will endlessly load it and it won't let me join them, saying "Unable to connect to world". For some reason if I then attempt to join a random Realm that doesn't exist by clicking the "Join Realm" button in the friends tab, typing some random letters into the text box and then hitting enter, it will then allow me to join the servers again.
When I'm playing on a multiplayer world and I want to go to a different window I'll just exit full-screen via Win-Shift-Enter and then alt-tab away.
In the latest beta, input delay does not seem to be gone. This might only be for me, but if I turn my anti-aliasing up to 16, I get a lot of input delay. (About half a second) If I then turn it down to 1 (which is the lowest available setting) I get virtually no input delay. I had VSYNC on during these tests.
For anyone who may be experiencing this, I made a small resource pack that adds a max framerate slider and a vsync settings option into the video settings (For vsync, you may still have to restart Minecraft to see the change.)
https://www.mediafire.com/file/mbq5mpkcy45offr/Vsync_%252B_Max_Framerate_Settings.mcpack/file
Something that works for me is turning down my Anti-Aliasing to 1. This might not work for everyone.
I fixed this by turning down my render distance to the lowest setting and turning vsync in options.txt off. They really need a vsync toggle ingame.
Nat Bong is correct.
Mobs also can cause MCPE-98861 on multiplayer worlds (haven't played on many single-player worlds, so I'm not sure about those.)
Seems to be caused by lag when you're looking at a lot of entities, a lot of chunks are loaded (for me, this can be mostly fixed by simply lowering my render distance), or you're on a laggy multiplayer world for example. I'm feeling mouse input delay and keyboard input delay (MCPE-85756) when this happens
Chunks take much longer to load and unload in 1.16.200 and above. I'm on Windows 10.
If a player dies while in a swimming state, this will also occur once they respawn.
This occurs more strongly on multiplayer worlds or servers, if I'm playing on my own world, there's way less input delay. Disabling gfx_vsync didn't work for me either.
affects 1.16.201
You needed to claim the skin pack for free on the Marketplace back in Minecon 2019. If you claimed it afterward through the website or never had the skin pack at all, it probably won't show for you. I claimed the skin pack back in 2019 and the Founder's Cape is showing properly for me. (1.16.200)
affects 1.16.200
can’t believe they finally fixed it! I only finished the entirety of high school during the time it took them LMAO