I'm not sure whether this was a bug or just a feature that hasn't been implemented yet. The blast damage of Avalons and Sunflares have a nasty habit of traveling through solid objects. From my understanding the actual weapon graphics fly right through any object in the game, and it is a known graphic glitch (best illustrated by "the dev gun"). However, I do know that "the dev gun" is incapable of hurting people through asteroids, despite the beam traveling through it. So I suspect that Avalons and Sunflares can be made the same way.

Let me give an example of how the Avalons should react with improved explosions. Someone at the opposite end of the docks of the s10 station (on the surface of the carved asteroid) can currently be nuked within the very caves below that person. Simply face the docks, drop an Avalon, and dock immediately. The person at the other end (across the thickness of the asteroid) will either be dead or badly damaged. It just doesn't look believable for an Avalon's blast to travel through the thick core of this asteroid. If there was some way of containing the explosion within the confines of the cave, it would not only be more believable, but also less exploitable. It could be the first step towards stopping station nukers also.

And it would create a whole new tactic of hiding behind roids... :D I like...

I understand what you're saying but it seems to me that it may require a lot of coding to pull off, so I don't expect to see it any time soon. it'll probably come when 'asteroids-blocking-radar-signal' shows up, since the ideas are the same.

Yep, area effect damage does travel through everything. There's no line-of-sight checking. I never thought of it as a problem so we never bothered to make it different, but as was pointed out hiding from explosions behind things would be pretty cool.
The dev-beam-gun checks for the nearest intersection and doesn't do any damage past that.

but what about when i nail the station wiht rockets? the bits of metal that are blown off by the blast should cut people to peices! It's just like feeling an earthquake on teh opposite side of the world. Stuff gets screwed up on both sides of the station.(my excuse for why when you nail station, it hurts people)