We use multiplayer. I got up on a tall structure and noticed how far away in the distance I could see active mobs. There was definitely a point where the mob completely disappeared even though the scenery at that distance and much farther away was visible. We were setting "view-distance=15". This is the maximum setting.

I don't think mobs and creatures should disappear unless the scenery itself is not visible - either because the distance is too great or the video settings do not allow it.