Disabling chunk generation below Y=0 does not work

[Taboshkas]

Expected behavior

Chunk generation below Y=0 to be disabled in existing chunks when a 1.12.2 world is migrated to 1.21.1 when setting below-zero-generation-in-existing-chunks: false in spigot.yml.

Observed/Actual behavior

World migrates successfully, but generates chunks below Y=0 when players move around

Steps/models to reproduce

1. Start new paper-1.21.1-128 server in empty directory
2. Accept EULA
3. Restart server to generate default configs
4. Stop server
5. Change below-zero-generation-in-existing-chunks to false in spigot.yml
6. Delete world/
7. Copy 1.12.2 world into directory to replace world/
8. Start server
9. Join server and fly below Y=0 in spectator mode

Plugin and Datapack List

/plugins: None
/datapack list: There are 3 data pack(s) enabled: [vanilla (built-in)], [file/bukkit (world)], [paper (built-in)]

Paper version

This server is running Paper version 1.21.1-128-master@d348cb8 (2024-10-21T16:23:24Z) (Implementing API version 1.21.1-R0.1-SNAPSHOT)
You are running the latest version
Previous version: git-Paper-550 (MC: 1.19.4)

Other

No response