Performance degrades when you get many hash collisions, which will happen if you have a lot of points clumped together in space. Sparsity is fine. For points

Performance degrades when you get many hash collisions, which will happen if you have a lot of points clumped together in space. Sparsity is fine. For points you expect to be unevenly distributed the more advanced spatial partitioning data structures (kd tree, BVH) perform better.