Pokemon Go's Nearby feature is quickly fading away. When it released in the US, each Pokemon was given a "steps" icon to indicate how close it was to the viewing trainer.
Within about a week of the Pokemon Go craze, the step indicators appeared to go on the fritz, where all Pokemon appeared at a distance of the highest and most ambiguous value of 3+ steps. Adding to its pile of obvious Pokemon Go bugs, most people referred to this issue as a bug or glitch.
After a few days and the relatively trivial nature of a distance formula, many realized that this problem was not a bug, but a coping mechanism to handle the excessive load on the application's servers.
With the 7/31/16 version 0.31.0 update, this notion has been cemented--the steps indicators have been removed. However, the Nearby screen remains.
Over this time, people have pointed out that the order of Pokemon listed in the Nearby screen is listed in closest to farthest, like written text from top left to bottom right. What is the value of this representation? If nearly all Pokemon are at a long distance, it's nearly impossible to track them down through diligent walking and triangulation, as new Pokemon are added to the list, its order can shift drastically.
Personally, I think the lack of adequate distance indication makes the current Nearby screen useless. It's nearly a vanity and perhaps just psychological bait to elicit a "Ooh, a Pikachu. They do exist!" response. People walk around a little bit, fail, and then give up and move on to the closest Pokestop.
Granted the distance puzzle makes people walk around more--more or less the motive of "Go". Given what we've seen so far, where is this feature going? Is this update a step in its slow deterioration. In the next update, is it going to be gone? Maybe the step indicators will be restored once server load stabilizes.
The problem I see is that the Nearby screen was never done well from the beginning. A flat list is not how people think of proximity in a 2D space. If providing distance measures is problematic for these servers, what information is actually provided?
Perhaps instead of distance, trainers can be provided a direction or bearing. I made a mock-up of this idea:
I believe this approach is a healthy and reasonable compromise to provide meaningful information without giving away too much. One may have to walk around for quite some time but there is reassurance that these Pokemon are obtainable and that the Nearby screen is helpful. All the while, people would still be walking and traveling about their community.