The observer block don't updates dropers/dispensers properly In the first image you can see a colum of droppers facing upwards. The middle one is block by the QC of the upper observer, but the first dropper is not blocked by the first observer in the chain. In second picture, removing the block above the upper dropper makes the middle one work. These behaviors don't should happen as the observer makes a 1 RS tick pulse should update the dropper correctly. If you extend the tower, what you can expect is that every 3 blocks this happens.

Edit: As the behavior of the observer has changed the problem is not as visible but if you make a delay of 1 tick, between droppers (trying to make as it's shown ) still happens and the items remain in the same dropper