Joe... if you manipulated the edit handles that appear with a green rectangle/circle when you select the edge of the penetration then you would end up with the results that you described below. This is because that green rectangle/circle is actually the feature (created by the penetration) that is stored on the DGN. The feature is linked to the penetration until the feature is manipulated to differ from the penetration. Manipulating the feature breaks the link and stores the information about the feature entirely onto the wall/slab that it is cutting. Thus when you move the penetration the original (modified) feature cut is still there and a new feature cut is created in the new location. If this happens you can use the delete feature tool to remove the original modified location.
-Travis