The reasoning this feature was added, was to prevent server hopping from combat, server hopping for loot & server hopping because of night. As for spawning near other players, that's just bad luck. I personally enjoy this feature (and yes, it's a feature not a bug) as it prevent's people like yourself from abusing the system. Be glad that your loot still carries over on a server hop. If anything I can use a server hop to get myself further north where the good gear is and then hop back to my intended server.
My recomendation for you, is to get used to how the game is meant to be played or try out community servers, as there are 24/7 day servers, 5x loot servers but the best thing about it is that you can't server hop to safety from combat.
//Lyim 😛
