When projectiles spawn inside a hitbox, they don't hit the hitbox of the entity they are inside

Trying to shoot entities with a bow and arrow from close range doesn't work. This also affects other projectiles. Withers shoot through blocks from close range as well.

Occurs when the shooter hitbox overlapping with the mob hitbox, or the mob/player is next to the dispenser

applies to skeletons, players, pillagers, illusioners, strays, wither skeletons with a bow and snow golems for sure; presumably also blazes, ghasts and ender dragons (with a dragon fireball)

It happens when the projectile's "hit area" (area where the projectile hits the entity, not equal to its hitbox) intersects with the entity's hitbox, so it happens not only when you touch the shooting spot, but a bit away from it too
(see the spawn points of the arrows from dispenser in screenshots spawn 1.png and spawn 2.png)

Simple reproduction steps:

1. Place an upwards facing dispenser
2. Put in an arrow, snowball, fire charge, ender pearl, splash potion, lingering potion, or any item that creates a projectile when fired
3. Place a pressure plate on the dispenser
4. Let any mob or player step on it
5. Observe projectile going through the mob or player that stepped on the pressure plate

https://gfycat.com/GregariousLegalBasenji