This is a re-occurrence of a bug that has been fixed a few times in the past but seems to re-occurs after a major update (see SPIGOT-508, SPIGOT-657)

If you summon an armor stand with gravity turned off and then turn on its gravity with ArmorStand#setGravity, it falls through all of the blocks in the world and into the void.

The commit that fixed this bug in 1.8:
https://hub.spigotmc.org/stash/projects/SPIGOT/repos/craftbukkit/commits/bbf72f30606084e61b28a7521f46c9c34caeaeda