I am a bit of a beginner, so I don't fully understand the way the air flows around the rotors in a quadcopter. My question is in the title, and I am basically wondering if something can be mounted adjacent to the motor, and directly beneath a part of the rotor, or if it will cause poor performance on that rotor. I have a very long camera which I can mount to the front of my drone body, but the edges of the camera lie directly underneath two of rotors. Will this cause performance problems/is it a better idea to mount it above them? Thanks!
If you block the airflow into or out of a rotor, you reduce the lift it can generate (approximately) in proportion to the area you block. That means the motors will have to work harder, and your flight time will be reduced.
Work out what percentage of the total rotor area your camera will block. If it's more than about 20% you should probably look for a larger frame.
Obstructions above the rotors are less critical when hovering (as the rotors are sucking in stationary air from all sides) but in forward flight the airflow is more linear - and rotors don't like working in disturbed air so it's worse for high speed flight.