Don't think so. I've "run out" of lag zones (obviously it's much bigger than just one town; e.g., thunderdome is always affected in full when skulltown is lagging) plenty of times. Going back seems to bring back the lag (although I don't think I've done it that many times). Could have been a coincidence I guess. I don't experience it that often.
The way this game deals with server lag IS quite weird though. Usually in other games it's "teleportation", "frame"-skipping, rubberbanding. I'm not sure which approach I like more though. I just take comfort in knowing that everyone is slow (at least I hope everyone is), so odds are equal.
P.S. I personally never experienced it outside early game (up to maybe 3 min in the game, no more). PC, game on SSD.