Well if you ask me to choose between the old settings (people being able to swing through walls, the ground and other team mates) and the new settings (side swings hitting team mates if they are next to you), i strongly prefer the new settings.
Preventing those team kills is hard, but mostly just take a bit of practice to get used to. What really helps is to switch targets when you see 3+ team mates going for 1 guy. Don't be kill greedy.
And about dealing with shielders charging in between you and your team mates: just keep facing him and step back with him into safety. When he tries to swing at you, keep stepping back and block and let your team mates kill him. If he doesn't go for you, just hit him with a quick overhead when he tries to swing at a team mate.
Or get in close and step through his shield and hit him with a quick side swing. Shield collision is a bit borked at the moment, indeed.