Minecraft version: 1.16.5
Mod version: 1.7.14 (pandemonium also installed; same version)
Other mods installed: [see attached image]

Whenever I press the dissociate key to exit a player shell, it reloads all chunks and takes about a few seconds before gameplay resumes. Entering player shells & entering/exiting mobs are completely unaffected.

Gameplay is not affected majorly, but it tampers with the illusion a little.

Is this still an issue as of the latest beta?

I have not checked yet, but will provide updates when I do.

This was indeed an issue with earlier versions, it should be approximately seamless now.