There are around 22 entries in the /etc/password file
However, only 1 or 2 users are simultaneously logged in

I also checked pp_syc.c file upto 5.16.0
The mentioned code snippet didn't have any significant code changes- apart from the following minor change:

dSAVE_ERRNO;
const struct spwd * const spwent = getspnam(pwent->pw_name);
RESTORE_ERRNO;
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Will try to make the change which rurban suggested: Try to disable HAS_GETSPNAM in config.h
Searched all the c files and found that HAS_GETSPNAM is used only at this place.
Please let me know if you think this may have any undesirable side effects