Updating to the latest 3.8.0 version still results in the same issue. I suspect it's related to altitude.

"Dungeon Height (Y coordinate for dungeon)": 1300.0,

Updating to the latest 3.8.0 version still results in the same issue. I suspect it's related to altitude.

Same here for me too, still same issue height we have is 1000.0 though

i got the same issue 

So use 800 for the height.
So the walls do exist, but are they transparent?

You can test it by setting the height to 1300. According to my test, the walls are non-existent, and you can pass through those areas where the walls are not displayed and fall down.

Must be a game limit, use lower.

800