If you are high enough up in the air you shouldn't need to light up anything below. Is your AFK position more than 128 blocks above the ground?
It is the server render distance that matters, not yours, so check if the server render distance is 10 or more.
Spawn chunks shouldn't matter. There is no real advantage to building a general mob spawner in spawn chunks, because they are only active when you are nearby, but it also shouldn't negatively impact the farm. As long as you are within that 24-128 block range it should work.
HOW high up in the air? Are you personally more than 128 blocks higher than ground level? If not, then yeah, you may need to move the farm or your AFK spot for using it higher off the ground, or else light up any near-subsurface caverns.
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ground level is around y=80 the farms starts at around y=180 then i got several layers of the spawn platforms and on top of that i built an afk platform 24 blocks away from my topmost spawn platform(so i should be far more than 128 above ground level). i also tried building the afk platform 24 blocks in y axis as well as z/x axis but it didn't change anything. the killing hoppers are 35 or 40 blocks (can't remember) away from my farm so the items despawning after 128 blocks also can't be the issue i think
Edit: i have no permission to see the servers properties but i asked my friend who rented it if he can to see what the servers render distance is (or is there a way to see this from my client?)