Good question. In scripting, dynamic entities are triggered by proximity. The script just loops until the player is within x units. This would be the case whether the entity is "visible" or not, because the script has to keep checking player proximity to decide whether or not to make it visible.
The advantage would be in less poly drawing, and you'd need to know at what distance it would be profitable to hide and show an entity. In a given level with this wall and that, when would the engine begin to draw that entity, how long could you delay it, and will it be the same for any given room/door/wall configuration?
Also, would it be profitable to - through scripting - keep the entities collision off until the player is very near, or would the extra distance checking be a trade off?
All very confusing.
Brian.