Not just in towns, random encounters are prevented from spawning at all in classic when loitering (I believe quest-related enemies can spawn). Since you can't sleep outside in towns you have to encounter random enemies that spawn outside at night in "real-time" in classic.Classic doesn't spawn random encounters in towns by loitering.
Just need help getting up and running or have a general support question? This is the place.
Yes I've noticed this, too. I think Interkarma may have alleviated this but you can still pile up a lot of monsters if you sleep outside for a long time.Sometimes it says "you cannot rest when enemies are nearby", sometimes not.