Let's say we summon an armorstand with a block on its head.

/summon ArmorStand ~ ~1 ~ {ArmorItems:[{},{},{},{id:wool,Damage:14}],Tags:["Test"]}

Now we will teleport that armor stand -20 down, for the x-axis.
After that we should see the armorstand looking down.

/tp @e[tag=Test] ~ ~ ~ ~ ~20

When you do this, the armorstand should look down.
But because of the bug, the armorstand is not updated.
The armorstand is actually looking down, but it's a visual glitch.
When you try to do it any other way (/tp or Rotation tag) it will still not update.

I did some more testing and noticed that you can only update the
armorstand's x-rotation visually by using /entitydata with a Pose tag.

It's just the x-rotation which is visually bugged, and not the y-rotation.