Here's some additional info regarding how the client and server handle showing and hiding "world objects" (typically players, but also NPCs, mailboxes, etc. Note that NPCs are handled a bit different and will be hidden at different ranges depending on how many other NPCs are visible).
1) The client will display a world object once it is within 250ft of your character. At this point you can mouseover/click on the world object and "mark" it.
2) Once the world object is visible, it will remain visible until it is 300ft away from your character. This prevents world-objects from flickering in and out at the 250ft border. It also makes it a bit easier to chase people you have already seen. At 300ft the client hides the world object. The "mark" will continue to exist.
3) Even if the world object is more than 300ft away, providing the server is still telling the client about it, the "mark" will continue to update as even though the world object is not being drawn, its position is still known and being sent to the client by the server.
4) At some point when the distance is too far - determined by the server - the server will tell the client that the world object no longer exists. At that point, the "mark" no longer works and vanishes.
Part of why marks can be seen from so far away is because the server keeps sending the client details on world objects that are much further than 300ft away. I just did a quick test and I could track a friendly player up to about 470ft away.
To my knowledge - and this might be out-dated now - the server keeps track of all world objects in a grid, and if a client is within range of part of a grid then the details of all world objects in that grid are sent to the client. If, for example (100% made-up numbers), the grid nodes/cells are all 300ft x 300ft and the data is sent to the player if a grid is within a 300ft radius of the player, then the player would be able to track someone up to about 725ft away:
In the image above (apologies if it completely breaks for colour-blind people): the client is the green dot, the 300ft view range is the green circle, the view range overlaps with the point in the middle so all 4 grids are visible, so the server will send the client data up to about 725ft away (the furthest corner).
Even if the real numbers are smaller (or larger?), if the server tightened up on what data it send to clients, tracking players further than 300ft away would become almost impossible as the client wouldn't know those objects still existed.