How to reproduce:

1. Open attached project
2. Open scene bugreport.unity
3. Play the scene
- Note how the cloth never passes through the legs of the character in motion
- The surface penetration in all vertices of the cloth is set to 99999
- Modifying the surface penetration (setting it to 0) changes nothing

- By Design: Surface penetration constraint does work, but it's quite hard to notice it in this given scene. To see the constraint work, try changing the value for a sphere mesh, it certainly gives the difference.