No limitation that I can think of. Usually if it doesn't separate anything, means it didn't find a conflict. So that first property setting 'BufferWidth' is very important. That is what it uses to find a conflict and then it uses the next value 'offset' for the new spacing. ***Remember that these settings are interpreted in map units. So if your map units are decimal degrees and your conflict setting is 1...well, it will be a bit strange. So make sure to either have more realistic map units, or to set the property value to something that makes sense based on those units '.00005' for example.
If you still can't get it to work, if possible, export your diagram as XML, clean up any critical information as needed, and get it to me so we can take a look.