The reason I'm asking is this : started a new game where all PCs are noble animals or magical beasts.
I'm playing a noble rabbit Unchained Barbarian (psycho murder bunny). I know combat gimped - it wasn't about min/maxing, but the humorous connotations and a nod to Monty Python and Pooky from Red Dragon Inn.
Since tiny and smaller creatures don't threaten adjacent squares and have to enter opponent's squares to.attack, can they remain in that occupied square? Furthermore, can they 5' step into an opponent's square?