This bug is extremely annoying. As a developer, it is impossible to properly utilize custom character loading because due to a unknown memory leak, when LoadCharacter is used frequently in-game, it causes massive server lag and often crashes.
My game had a spawn delay. Every time the character died, the wait time was 30 seconds before they respawned. As soon as this feature was added, our crash rates went up twofold, and we had massive complaints about lag whenever the server got above 30 players. We immediately disabled this new feature, and all the lag issues were fixed.
I have confirmed that this was caused by LoadCharacter() - without that function call the script otherwise runs fine.
There have been many bug reports about this but no response, will this ever be addressed?