All characters start disabled in the multiplayer mode, and are enabled when the client starts receiving position updates for the character, OR when the server starts receiving inputs from the client controlling the character, OR if the character is controlled locally. (-> no more floating, frozen characters at the start of a round)

+ the server disables AICharacters that are far away from all players

Subsurface/Source/Characters/AI/EnemyAIController.cs

@@ -68,8 +68,6 @@ namespace Barotrauma
                         
         public EnemyAIController(Character c, string file) : base(c)
         {
-            if (GameMain.Client != null && GameMain.Server == null) c.Enabled = false;
-
             targetMemories = new Dictionary<AITarget, AITargetMemory>();
 
             XDocument doc = ToolBox.TryLoadXml(file);

Subsurface/Source/Characters/Character.cs

@@ -618,7 +618,12 @@ namespace Barotrauma
 
             CharacterList.Add(this);
 
-            Enabled = true;
+            //characters start disabled in the multiplayer mode, and are enabled if/when
+            //  - controlled by the player
+            //  - client receives a position update from the server
+            //  - server receives an input message from the client controlling the character
+            //  - if an AICharacter, the server enables it when close enough to any of the players
+            Enabled = GameMain.NetworkMember == null;
         }
 
         private static string humanConfigFile;
@@ -1258,12 +1263,31 @@ namespace Barotrauma
 
         public static void UpdateAll(Camera cam, float deltaTime)
         {
-            //if (NewCharacterQueue.Count>0)
+            if (GameMain.Client == null)
-            //{
+            {
-            //    new Character(NewCharacterQueue.Dequeue(), Vector2.Zero);
+                foreach (Character c in CharacterList)
-            //}
+                {
+                    if (!(c is AICharacter)) continue;
                     
-            for (int i = 0; i<CharacterList.Count; i++)
+                    if (GameMain.Server != null)
+                    {
+                        //disable AI characters that are far away from all clients and the host's character
+                        c.Enabled =
+                            CharacterList.Any(c2 => 
+                                (c2.IsRemotePlayer || c2 == GameMain.Server.Character) && 
+                                Vector2.Distance(c2.WorldPosition, c.WorldPosition) < NetConfig.CharacterIgnoreDistance);
+                    }
+                    else
+                    {
+                        //disable AI characters that are far away from the sub and the controlled character
+                        c.Enabled = Vector2.Distance(Submarine.MainSub.WorldPosition, c.WorldPosition) < NetConfig.CharacterIgnoreDistance ||
+                            (controlled != null && Vector2.Distance(controlled.WorldPosition, c.WorldPosition) < NetConfig.CharacterIgnoreDistance);
+                    }
+                }
+            }
+
+
+            for (int i = 0; i < CharacterList.Count; i++)
             {
                 CharacterList[i].Update(cam, deltaTime);
             }

Subsurface/Source/Characters/CharacterNetworking.cs

@@ -212,6 +212,10 @@ namespace Barotrauma
                     memInput.RemoveRange(60, memInput.Count - 60);
                 }
             }
+            else //this == Character.Controlled && GameMain.Client == null
+            {                
+                AnimController.Frozen = false;
+            }
 
             if (networkUpdateSent)
             {
@@ -288,6 +292,8 @@ namespace Barotrauma
                     UInt16 networkUpdateID = msg.ReadUInt16();
                     byte inputCount = msg.ReadByte();
 
+                    if (AllowInput) Enabled = true;                   
+
                     for (int i = 0; i < inputCount; i++)
                     {
                         InputNetFlags newInput = (InputNetFlags)msg.ReadRangedInteger(0, (int)InputNetFlags.MaxVal);
@@ -763,7 +769,7 @@ namespace Barotrauma
                 }
             }
 
-            character.Enabled = enabled;
+            character.Enabled = Controlled == character || enabled;
 
             return character;
         }