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I tend to turn block limits off and just ignore the game's whining and things mostly work okay. Only when I notice actual slowdowns do I start looking for stuff to delete.
These days I find the biggest offender towards that though are scripts.
Why Keen tries to update the physics of a grid that is too far away? I think no one cares that minor stuff compares to the lag it causes?
Short answer : Because the grid far away is likely doing something. Could be a remote mining drone slowly going through an asteroid and refining ore to ingots. In the process it might receive scrapes and might break down. That's voxel updates, inventory updates, and physics updates. Also, you could remote control those far away ships.
Observation : This is both good and bad aspect of Space Engineers. Games like Minecraft unload areas from memory which reduces lag, but if you actually wanted that to keep running, you can't unless you built it in certain areas. Space Engineers keeps all the grids loaded even if they aren't doing anything, because they might need it, but this makes lag.
I've had previous Space Engineers games (long ago) grind almost to a halt because the game spawned in random encounter and they left the area but were still in memory. Using space master mode, I find there were several spawned ships that were 5km away but now 150km away but still in memory and being processed. Since then Keen cleaned up the routines for that.
There is a mod on workshop called NPC Performance that I've been meaning to try and also apparently Torch server addon does concealment a lot better than Keen's for dedicated servers if that helps.