Placing signs on any place in the realm is fine, but the formatting choices are not applied when the player is done editing. For any single player world, formatting is still applied and the edits can be seen in the background. For any realm, the formatting is "resetting" the previous characters (i.e. spaces are shortened to one space, shifting to the lower line through the "enter" key is reset to a space, etc). Along with realm signs, seeing the edits in the background show the text shifting and "resetting" after each character.