Withdraw into occupied space

[telechus]

The following scenario came up dieing play.

A NPC was trying to get out of a bad situation and decided to withdraw. Her path was blocked by PCs and the NPC would have had to enter a space occupied by one of us. While withdraw keeps us from getting AoO when the NPC leaves her space, would it provoke one when she enters a space occupied by a PC?

[Fuzzy-Wuzzy]

Yes. The benefit of withdraw is "the first space you leave is not considered threatened by anyone you can see" and that's it.