Can attach 12 disks to instance (11 local, 1 distributed) but VM won't start

Theoretically, we support attaching 12 disks to an instance.
However, in the latest run on Madrid (where there is plenty of space to allocate local disks), I saw that an instance with 12 disks (11 of those being local) won't boot up.
Checking the error message, we get:

"Insufficient capacity: Failed to place instance: Could not find any valid sled on which this instance can be placed", 

Switched to 1 GiB disks instead (surely, 1 GiB local disks should be doable), but I still got the same message.
@leftwo mentioned there's a condition for local disks to be placed in different physical disks, so even if there is enough storage (as a whole), if the number of physical disks is less than that then the request fails.

Maybe if we are already aware of this constraint, the error message could make a reference to that, since this only gets checked after we attempt booting the VM.

Start by tracing instance placement for a request with 11 local disks and one distributed disk, then inspect the capacity error path shown in the issue. Confirm how the physical-disk constraint is checked after boot placement and make the failure explain that constraint; reproduce the 12-disk case to verify the resulting message.