The 3E rules don't clearly state what happens if you stay in someone else's square. Here's a house rule that attempts to address this question -- it needs poking and prodding to make sure there aren't any unpleasant loopholes.
Occupying the same square
Moving into the same square as another character provokes an Attack of Opportunity for any characters that threaten the moving character (in either square), even if the moving character is otherwise undetected. Any attack against a target in a square occupied by more than one character has a 25% chance of accidentally targeting a different character (determined at random if there is more than one choice).
If a character occupies the same square as a defender without performing a specific combat maneuver (such as Grapple, Bull Rush, or Overrun) and the defending character is unwilling to let the character remain, then the character (unless prone) moves back 5 feet the way the character came. If that space is occupied, the character falls prone in that space. If two characters start in the same square, a Grapple check determines who must move out of the square.
If the defender is willing to let the character remain, or if the character cannot move out of the square, both lose their Dex bonuses to AC (if any). (Exception: A willing prone character does cause other characters in the square to lose their Dex bonus to AC.) If willing and unwilling characters occupy a square, the willing characters no longer threaten nearby spaces and must make a Concentration check (DC 10 plus spell level) to cast spells.
A character attacking another character in the same square can only use light weapons.
Occupying the same square
Moving into the same square as another character provokes an Attack of Opportunity for any characters that threaten the moving character (in either square), even if the moving character is otherwise undetected. Any attack against a target in a square occupied by more than one character has a 25% chance of accidentally targeting a different character (determined at random if there is more than one choice).
If a character occupies the same square as a defender without performing a specific combat maneuver (such as Grapple, Bull Rush, or Overrun) and the defending character is unwilling to let the character remain, then the character (unless prone) moves back 5 feet the way the character came. If that space is occupied, the character falls prone in that space. If two characters start in the same square, a Grapple check determines who must move out of the square.
If the defender is willing to let the character remain, or if the character cannot move out of the square, both lose their Dex bonuses to AC (if any). (Exception: A willing prone character does cause other characters in the square to lose their Dex bonus to AC.) If willing and unwilling characters occupy a square, the willing characters no longer threaten nearby spaces and must make a Concentration check (DC 10 plus spell level) to cast spells.
A character attacking another character in the same square can only use light weapons.
