Hollow in Prim mismatch?

I was building a game when I stumbled upon something weird (or not...)

If I make an object hollow, and use the inner space to confine other prims, I find that the 'inner walls' of the hollow object seems to stretch for another five say ten cm?

That is, a ball bouncing on the inner side of a hollow object will bounce BEFORE it reaches the inner wall...

I've had another see the phenomenon, and I've seen it on at least three different shapes, so I don't think it's anything local.

Is this a known bug? What can be done about it?

And, I've also noted that I can shoot object 'thru' walls if the velocity is high enough. But I think I can see why, so I shouldn't be surprised, right?

I believe both are limitations of the Havok 1 physics system. The "physics wrapper" around the object actually covers all surfaces, not just hollows. One of the newer Havoks (2? 3?) eliminates this.