It is difficult to evaluate the problem just with the provided information and this is an old question, but hopefully my answer helps someone with a similar issue. I believe that the problem is that you selected the surface-to-surface contact interaction and then you chose one surface in the cutter and the other one in the workpiece. Consequently, Abaqus calculates the interaction between surfaces and once one or more surface elements get deleted, there is no interaction defined between the inner elements of the workpiece and the tool. The absence of this interaction makes the tool go through the elements without interacting with them. To solve this problem you could define a node set of the cutting region and select that in the surface-to-surface interaction. This will make the tool surface interact with the nodes of the cutting volume, solving your interaction problem.