Items in the arrow tag are able to be used like arrows from bows but not dispensers.
To Reproduce
Load attached datapack in a world.
Get dirt and a bow.
Enter Survival mode.
Use the bow.
Notice the dirt is used as an arrow.
Return to creative.
Get a dispenser, a button, and dirt.
Place the dispenser, place the button on the dispenser, and the dirt inside it.
Notice that the dirt is spat as an item.
Attachments
Comments 2
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After consideration, the issue is being closed as Invalid.
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Confirmed. Please note, however, that the attached file is not a data pack; it is a zip file containing a data pack folder. I've taken the liberty to fix it for you.