Each town has it's own group of "homeless NPC's" that it uses to fill jobs like the Tattoo Artist, paparazzi, and to flesh out rosters at rabbit hole careers. They're called homeless, because when you start playing, they don't actually live in the town. It's not uncommon that these sims move into a house through story progression eventually. And I'm not totally sure how the LN bars work in the towns outside Bridgeport but if you put them in these towns, I suppose it's reasonable to believe that that if the game runs out of people to fill roles like bouncer and mixologist at these establishments, that some of these sims could be "recycled" in a sense.
I've played Sunset Valley a whole lot more than I have any other town, and I'm much more familiar with the homeless NPC's there than I am anywhere esle. If you remember this sim's name, I can probably identify them as such. Also, what were these sims doing when you encountered them?
I have heard of people having problems when playing with story progression disabled. However, this was not one of those problems lol. The biggest issue is that everyone in the town dies of old age, and the active sims are virtually the only ones left in town. For this reason, if you play with story progression off, it's not a bad idea to play with aging off as well.