It is contacting the skin, but at such an angel that it's trajectory is near parallel to the skin.
The result is that the tip does not even contact the skin, what first contacts the skin is the corner of the round (if you want to call it that) where the side of the casing begins, and the nose ends. This makes a very poor penetrater, and coupled with the severe angle and resultingly small effective force (only a few thousand joules are actually directed against the skin), the normal force applied BY the skin is sufficient that the round will slightly alter it's course to be either perfectly parallel to or directed slightly away from the skin.
This is part of what makes APDS rounds so effective. The tip can be extremely steep without being extremely long and less practical, thus requiring a correspondingly steep angle of impact before the tip does not engage, and normalization fails to occur.
Now this isn't to say the skin will be unmarked, denting, and minor tearing is likely to occur. But unless the tip gets below the skin, almost all resistive forces will be pushing the round back away from the skin.