In PS4, changed view settings to third person and back, and the glitch was gone. I can interact with all things again.
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I just tried on Xbox. It helped but didn’t fully fix for me. I was able to chop a few palm trees, but still can’t interact with most small palms or any yukka trees.
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Talking with a few others, this worked completely. Don’t know why. From the main menu, change view to third person, turn off clouds, turn off animals. Enter the game and turn all back on. Hope it helps
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Did not work ps4 for me. Just tried it. Always failed once I reached any island if I sailed out of object render distance. Glad it works for some though! 
Thanks for trying.
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it didn’t work for me
Did not work on my ps4.
My experience:
And it came back. I did manage to play with no issues for 6 in game days. Visited 3 previously visited islands plus 1 I had not visited before. Was back on home island building a big old house.
Was literally hammering a wall to build it and it glitched right in the middle of doing that (stopped constructing the wall).
It was late so I just turned off the game, but I will make the changes again tonight and see if I get interactions back.
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Just adding to this.
I DISABLED ANIMALS only in the Main Menu settings. Loaded in to the game and I could interact with everything normally. I re-enabled animals.
Again I played about 7 in game days and then the bugged re-occured again. This time I DISABLED ANIMALS only, but in the during game menu, and everything was working again.
This seems to consistantly alleviate the bug for me for a while.
Interesting note though (as it seems to relate to ‘height’ and ‘dropping’…
At one point when I was playing I jumped from my new tall house to my old small one, attempting to land on its roof. I missed a broke a leg. At the time I made a splint and fixed myself up.
When the game crashed, I loaded up my previous save, and as my character spawned by the shelter, he fell a short drop and made the pain sound (like what happens when you have a non-splinted broken leg and you jump). I didn’t think too much about it, as I thought maybe I saved after I broke my leg but before I made a splint (don’t think I would have done it this way but couldn’t remember).
Anyways, whilst playing my second round of 7 in game days without the bug, I had saved multiple time (many saves between the broken leg incident and now). Now when the games crashed and I have to load my save, I ALWAYS spawn in the same way, character drops and I have a broken leg.
Thought it may be related. The snake spawning theory ties up with the disabling animals option BUT all my latest bugs have been happening on my Home island (where ‘big’ animals never have spawned).
And now this ‘dropping’ in on spawn has me wondering.
So far this work around is working for me. On ps4 and played for about an hour last night without issue. Thanks my friend!
Glad to hear this workaround is continuing to work for some players!
@Reebont - with regards to your dropping on respawn, I’m going to create a seperate report on it but link it to the interaction bug in case there is some sort of connectiong there. Thank you for sharing that information in detail.
If one is just wanting to start a new game. Make 5 custom islands That surround your starting island and also a custom start location with no animals on those islands.Start the main game with animals turned offAnd only go to those islands and when they are depleted go back to your main start location save and then remove those islands with new custom islands with no animals and never build shelves on base or on raft and game will never get INTERACTION BUG. Been playing now from day 1 to 46 and never loss interaction with anything at any height! Hope this helps some who want to get a head start
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I did this exact thing last night and seem to be having no issues as of yet!