Each type of pet has a certain amount of spare space around them, much bigger than what you would normally see. As above, you can put the item, more away from the pet and watch the box grow bigger, but there is still a limit and you will find the item part out of the box if you go too far away.
When saved, everything that was in the box, is what you'll see after.
You can also put items out side of the box by carefully edging over the box line, to almost/completely disappear from view when saved and viewed. I tend to use this if I'm being fussy, saving the pets png image (easier for editing while keeping maximum space, instead of cropping out the item image.)
People put the items to the bottom to move the "Username's Pet" tag out of the way when saved and viewed, usually seen in topics.