Armor stands can't be placed if there's another entity (even items, arrows, area effect clouds, ...) in the same block

Armor Stands are unable to be placed with any same entity that shares the same block. This includes Items, Area effect clouds, Arrows, and any other entity. This happens even if the Armor Stand is a Marker. Armor Stands are also unable to be placed when a block or entity is in the block above it. This happens even with Small Armor Stands.