When using displays a couple of things happens
When using spigot or clearlag, similar items will merge like their drops would. and in the case of clearlag, are taken away by the clear.
Secondly: like drops, the display items can be picked up by mobs. This is especially troubling for things like armour weapons and tools. Once you kill the mob, it will drop the display item as an actual drop. These are easily collected in hoppers and opens a way of duplicating items.

I recently made a head display and a skeleton walked off with it, nasty thief.
i killed him and got the item back as a drop. understandable about the external plugins - but spigot isn't a plugin and it also controls this. perhaps there is a way to make spigot ignore the display item?
I am not running any mods that control mob pickups.

spigot 1.8.3 is the version i am running, btw

Unfortunately nothing can be done about merging items as this is controlled by external plugins. HyperConomy has an API method which can be called by other plugins to determine whether or not an item is a display item. NoLagg used this API method in the past but I'm not sure if it's still in place.

Which mobs are able to pick up the displays? This was fixed a long time ago for zombies and I think a few other mobs. Are you running any plugins that could affect mob pickups? It's also possible that the stack merging breaks the displays and allows them to be picked up. I would test this without the merging plugin to see if it goes away.

Also, I just tested this, maybe a word of caution to users of this plugin is that hoppers will suck in the display and the item will end up stacking inside the hopper or connected chest as any drops would.