I’m using version 4.9, but from what I’ve seen in the source code, it should also affect 4.10 and 4.11.
When trying spawning an actor (Spawn Actor From Class) colliding with another one with the “Don’t Spawn” setting set in Collision Handling Override field, it works as expected - the actor is not spawned. However, when using the “Adjust if possible, but always Spawn” option, UE seems to snub the setting.
Looking at UWorld::SpawnActor in LevelActor.cpp, with the latter of the aforementioned options, there is no conditional branch that handles it, while when “Don’t Spawn” is set, it does call EncroachingBlockingGeometry and if it returns true, the actor is not spawned.