There is indeed no spawning happening whatsoever when running only this mod on a dedicated server.
I do see some messages from this in the console, but those are only the initial load and the adding/removing of the player thing.
12/08/2024, 05:19:01
[WalkerSim] Max View Distance: 12
12/08/2024, 05:19:01
[WalkerSim] View Radius: 96
12/08/2024, 05:19:01
[WalkerSim] Player added in simulation, entity id: 171, position: (409, -2525, 25)
12/08/2024, 05:19:01
PlayerSpawnedInWorld (reason: EnterMultiplayer, position: 409, 25, 2525): EntityID=171, PltfmId='Steam_76561197966484518', CrossId='EOS_00026dcc8a604eeb9ba74eeab2d223e1', OwnerID='Steam_76561197966484518', PlayerName='ErikRedbeard', ClientNumber='1'
12/08/2024, 05:19:01
[DECO] written 86697, in 27ms
12/08/2024, 05:19:01
[DECO] write thread 8ms
12/08/2024, 05:19:02
206.0269 SleeperVolume 398, 23, 2501: Spawning 412, 23, 2511 (25, 156), group 'zombieJanitor', class zombieJanitor, count 0
12/08/2024, 05:19:03
MinEventLogMessage: XP gained during the last level:
12/08/2024, 05:19:03
CVarLogValue: $xpFromLootThisLevel == 0
12/08/2024, 05:19:03
CVarLogValue: $xpFromHarvestingThisLevel == 0
12/08/2024, 05:19:03
CVarLogValue: $xpFromKillThisLevel == 0
12/08/2024, 05:19:07
211.0273 SleeperVolume 402, 26, 2529: Spawning 413, 26, 2534 (25, 158), group 'sleeperHordeStageGS36', class zombieNurse, count 1
12/08/2024, 05:19:08
212.078 SleeperVolume 398, 21, 2530: Spawning 398, 21, 2534 (24, 158), group 'sleeperHordeStageGS36', class zombieArlene, count 2
12/08/2024, 05:19:08
212.1784 SleeperVolume 398, 21, 2530: Spawning 400, 21, 2534 (25, 158), group 'sleeperHordeStageGS36', class zombieSteveCrawler, count 3
12/08/2024, 05:19:08
Spawn zombieSteveCrawler can't walk on block sleeperIdle 23993 with walkType 21
12/08/2024, 05:19:08
212.2782 SleeperVolume 398, 21, 2530: Spawning 415, 21, 2531 (25, 158), group 'sleeperHordeStageGS36', class zombieJoe, count 3
12/08/2024, 05:19:26
Time: 3.85m FPS: 20.00 Heap: 1886.9MB Max: 1886.9MB Chunks: 302 CGO: 18 Ply: 1 Zom: 1 Ent: 2 (5) Items: 0 CO: 1 RSS: 2802.3MB
12/08/2024, 05:19:34
238.4292 SleeperVolume 257, 27, 2502: Spawning 257, 27, 2505 (16, 156), group 'zombiePartyGirl', class zombiePartyGirl, count 1
12/08/2024, 05:19:34
238.5297 SleeperVolume 257, 27, 2502: Spawning 262, 27, 2511 (16, 156), group 'zombiePartyGirl', class zombiePartyGirl, count 1
12/08/2024, 05:19:42
246.7813 SleeperVolume 250, 27, 2502: Spawning 254, 27, 2505 (15, 156), group 'zombieJanitor', class zombieJanitor, count 2
12/08/2024, 05:19:42
246.881 SleeperVolume 250, 27, 2502: Spawning 253, 33, 2509 (15, 156), group 'zombieJanitor', class zombieJanitor, count 2
12/08/2024, 05:19:56
Time: 4.35m FPS: 20.00 Heap: 2005.2MB Max: 2005.2MB Chunks: 312 CGO: 12 Ply: 1 Zom: 0 Ent: 2 (10) Items: 0 CO: 1 RSS: 2932.6MB
12/08/2024, 05:20:01
[DECO] written 86800, in 27ms
12/08/2024, 05:20:01
[DECO] write thread 8ms
12/08/2024, 05:20:26
Player ErikRedbeard disconnected after 1.5 minutes
12/08/2024, 05:20:27
DynamicMusic: 171 successfully removed from Bloodmoon state cache
12/08/2024, 05:20:27
Client disconnected from dy mesh: Id: 171 Total: 1
12/08/2024, 05:20:27
[WalkerSim] Player removed from simulation, entity id: 171
I connected, walked around for a while and then disconnected. There is nothing between these 2 events other than adding and removing the player to walkersim.
I also tried disabling the pause if no player is online just to test, but to no avail.
If I run this mod in singleplayer it works and the console does indeed show zombies being spawned and despawned by walkersim.
PS: You can't use the walkersim show command in multiplayer and thus can't verify if there's actually a simulation going at all. But I assume that's normal behaviour since server/client stuff is not part of the mod interaction.