Ah, I see what's going on. For stuff like this, you need to set the minimum replication distance to be equal to the dimensions of the object being replicated. 

Now, if you are trying to create a pile of these things that cross each other but don't intersect, then you'll need to first change the Motion to Physics on the source object, do what I mentioned above,  add a couple of layers in the Z axis, convert to Real Instances and then engage the physics and run a simulation.