When a dispenser faces a solid block, instead of spawning the entity inside the block. It will pace it in a nearby in an open space. I found this when the dispensers for a TNT cannon I made starts putting TNT on top of the Cannon itself. This cannon worked as intended before 1.16.

In my testing it doesn’t matter if it’s a tile entity it’s being dispensed into, and it’s somewhat acts like a bed on where the item appears (based on compass directions).

The normal behavior is to have it to be forced out of the open face of the block it’s dispensed into before going up.