Was messing around offline with it and seemed to have some shell issues. When firing at a drone M4 at point blank range (my side touching its back) and the gun aimed right at its turret back the shell went through the M4.
I tried to catch it in a screenshot:
The shell can be seen out in front of the M4. The gunsight view showed the turret taking up the entire view so I don't think it was me missing, then again my eyes are hardly good.
There was no bounce flash to indicate it was just bouncing and flying into oblivion, but it's possible it happened too fast for me to see.
On another note, the new gun barrel inside objects not firing; Not sure if it's done so a certain amount of the barrel has to be inside the object to stop firing, but with the M18 about ~2ft of the barrel can be inside the object and it still fires.