I was using a AOKP ROM with lean kernel (4.1.x) and wifi tethering was working fine.
I then went to 4.2.1 and 4.2.2, WiFi tethering so far has been broken.
I tried Bigxie's deoxed, tried Android Revolution HD 10.x, and Rootbox's 4.2.2 nightly with the same result where WiFi tethering doesn't work. In my case, the client that is trying to connect will connect, IP is assigned but it won't be able to access the internet.
The ROM flashing were a full wipe, as well as dirty wipe - made no difference.