There is a long time bug in minecraft that causes lag spikes when crossing chunk borders. (Bug tracker code MC-162253) although this says it was fixed in the 23w16a snapshot for 1.20, almost every version since 2019 (MC version 1.14.4 and onwards) has had some form of this bug reported. there are 40+ bug reports for this bug.
There are a few fabric mods that fix this bug, notably the mod ForgetMeChunk
perhaps the lunar developers can even borrow the code from the latest snapshot. (idk if that is possible)
its also understandable to just not patch this and just wait for 1.20 to release.
Thanks for taking the time to read this and considering the proposal.