I've hosted the dedicated server and connected to it from the same machine and It does get VERY laggy, sometimes crashing.
I'm running an i5-4690K quad core at 3.5GHz, NVIDIA GeForce GTX 760 3GB, and 8GB of system RAM.
The dedicated server uses around 3GB and the client starts off around 2 and ends up about 4 after 15mins or so. This is usually when it starts to lag, freeze, and crash.
However I've never had lag issues playing offline or hosting a multiplayer session with multiple clients connected.
Here's some screenshots showing my system resource usage at different states. The first one is my system at idle, the second one is playing offline, the third one is running the dedicated server and connected to it from the same machine. Both instances are using the same savegame file. As you can see, running both the ds and client on the same machine is quite taxing on the CPU (as stated in the guide) but my RAM is also maxed in both instances so it's very likely that my RAM is insufficient, which makes sense since there's twice the data being loaded into RAM. The last image shows the memory usage of both after about 15mins of playing on my dedicated server.