i have something similar, but i cant pick up any drops and mobs are frozen in place, as if their AI was shut off. i have no performance issues otherwise, i run at a stable 100fps (with a 100Hz monitor), 30% to 70% CPU Load with a intel i5-12400F, and 14 GB to 24 GB ram usage of 32 GB. the issues appear even at bare minimum gaphics settings.
Edit: if i stand over some dropped items, leave the game, then re-join the singleplayer world, i can pick up the item i am standing over.