When an Item Display entity rides another mob, the pathfinding and behaviour of that mob partially breaks. They still chase players if hostile or follow players if passive and tempted by food, but do not spread out when crammed and do not idly move.

This seems to be unintended as the mob retains some of its behaviour, but loses other behaviour. 

To reproduce:

-Start a new creative superflat world.

-Place a repeating command block with the command:

/summon creeper ~ ~1 ~ {Passengers:[{id:"minecraft:item_display",item:{id:"minecraft:diamond",Count:1b}}]}

-Put a button on the block and press it, which should summon many Creepers.

-See that the creepers do not spread out or move at all, and some of them die due to entity cramming.

-If you go into Adventure mode, the Creepers will start to chase you, but constantly clip into each other whilst moving.

-Place another repeating command block with the command:

/summon creeper ~ ~1 ~

-Put a button on the block and press it, which should summon many Creepers.

-See that the Creepers immediately spread out and start idly moving. When you go into Adventure mode, they will chase you in an expected way. 

This is reproduceable with many older mobs (e.g. Silverfish, Zombies, Pigs, Cows) but does not seem to affect newer mobs (e.g. Vexes, Allays, Goats). The attached screenshots demonstrate this with Silverfish.