Town merchant refresh breaks online connection

Platform: PC (Steam)
Version: 1.1.3.0

What happens: After I refresh the town merchant, I can still walk,
but I can't shoot arrows, hit enemies or buy anything.

When: It started after the 1.1.3.0 update (Oct 22). It happens in
single-player online, in multiplayer, and when I join a friend's
world. My friends can refresh the merchant fine in their own world,
but when I join, they get the same problem.

Steps:
1. Go to a town merchant (online session).
2. Refresh the merchant stock.
3. Walking still works, but attacking and buying stop working.