Problem: Geodatabase annotation displays incorrectly in ArcMap
Geodatabase annotation is displayed with characters placed on top of one another.
If the spatial reference for the feature dataset is undefined, the data frame's map units are marked as unknown.
Solution or Workaround
Right-click Data frame > Properties. Switch to the General tab. Set the correct map units.
If you are uncertain about what map units to use, right-click Annotation layer > Properties. Switch to the Label tab. See the Properties section.
Data frame map units are automatically set based on the annotation's map units, if the annotation layer is first and only layer added.