Urshifu's Unseen Fist is supposed to let it ignore Protect etc. However, if you Dynamax, the Max Move breaking the Protect and dealing 25% of Original Damage takes priority over the Unseen Fist, so instead of ignoring the Protect with your Max Move, you only deal 25% damage.

Thank you for posting, I was able to reproduce the bug.

Hello there! We're currently working through older tickets, and upon testing this issue again, I have found this to still be an issue in our current version, 8.3.6.

My method:
1) Give myself a lvl 50 Urshifu, Single Strike Style; teach it a contact moves such as Focus Punch or Close Combat. Give is 10 Dynamax candies, as well as give myself /dynamaxband.
2) Use NPC editor to create an NPC trainer, with Hitmonlee lvl 50, whose only move is Protect. Make sure this Lee will be faster than Urshifu.
3) Enter battle. Lee will use Protect first, and then I dynamax Urshifu to use Max Knuckle. Battle chat says Lee wasn't able to fully protect himself, and his hp decreases to 70%.

When not dynamaxed, Urshifu's Focus Punch will one-hit-KO the Protected Lee, as will Max Knuckle if the Lee does not use Protect.

As such, I will go ahead and move this issue to internal. Thank you!