To start marking up an existing note, tap or start drawing below the existing text with the Apple Pencil. A seperate area for drawing will appear. There will be line with a drag bar betwen them that you can resize the drawing area with.
You do not need to open the mark up tool first, though it may take more than one tap of the pencil.
If you tap with your finger below the area you are drawing it a new text area will appear.
Lines will appear between the text and drawing areas. These let you adjust space for additional drawing or text. Drag the small dot on the left of the line.