Why is there CPU lag when 2 crafts become within 10km of each other?

I didn't know about a 100m threshold. What happens at that point?
All this definitely explains why the more crafts I land at the same spot on Mars (or the moon), the more lag I experience.

10 km, 1 km, 100 m, loading nearby craft

1km is the distance where crafts within the atmosphere get loaded.

@sflanker Makes sense. I had noticed the lag could be quite more intense with crafts loaded with parts.
On somewhat of the same topic, isn't there also a similar lag when crafts get closer than a kilometer? What's happening then? Crafts have to be within 1km for my Landscape of Auto-Fire Turrets to become sentient and try taking me down...

10 km is the distance at which other crafts that are not inside the atmosphere will be loaded such that they have a full physics model, run vizzy programs. Beyond this distance crafts will only have their positions updated based on basic orbital mechanics assuming no forces besides the gravity from the parent planet. If you set up two satellites on a perfect collision course, and then switched to control of a 3rd satellite that was more than 10 km away the first two satellites would pass right through each other without colliding. So you are correct, the extra CPU activity and consequent lag is due to loading the details of that craft (all of its parts, their state, meshes, colliders, etc.).