Spilled array formulas cannot spill into merged cells. Please un-merge the cells in question, or move the formula to another range that doesn't intersect with merged cells.
When the formula is selected, a dashed border will indicate the intended spill range.
You can select the Error floatie, and choose the Select Obstructing Cells option to immediately go the obstructing cell(s). As soon as the merged cells are cleared, the array formula will spill as intended.