This seems to have started with 1.8.9, with the introduction of minecraft realms. Additional LAN players attempting to join a world that is opened to LAN find themselves in an incomplete world; all they see is sky and clouds (what you see before a world is fully created). We tried this with both existing worlds and new worlds, and uninstalled/reinstalled minecraft on both the host and client machines.

Before 1.8.9, multiplayer worked fine.

Is multiplayer being disabled with the introduction of minecraft realms?