It is impossible to do these types of checks on serverside.

If the client can make a determination as to whether or not to draw a player the server can too (and refuse to send those packets). It's not impossible, just more computationally intensive and thus, more expensive (on the server side of things).

Naive way: Render exactly what the player will see on the server. Do this for every client and only send the data to the client if the another player enters the view.

More intelligent way: Keep track of the position and field of view of each player and do a single calculation to determine if that player can see another. If not, don't send the packets. It will require some predictions but that's no different than regular, modern game-specific network programming which already has to do that.

Servers these days have zillions of cores. It really isn't too much to ask to dedicate a thread per player to do this kind of thing. It just means that instead of one server being able to handle say, 500 simultaneous players you can only handle say, 100-250 (depending on the demands of your game).

If your players host their own servers then it's really no big deal at all! Plenty of cores for their personal matches with their friends or randos from the Internet. If you're a big company with a game like Fortnite then it's a huge burden compared to the low-effort system currently in place.