As far as I've noticed, if you have contacts on HUD and then enable Offset, it correctly spreads them. If they disappear for a moment and come back with Offset already enabled, contacts are piled up again.
So, new contacts get piled up on HUD even if Offset is on. Offset only works on already existing contacts on HUD at the time you enable it.
Workaround is to disable and re-enable Offset when new contacts appear.