hi Tattie, i have been playing around with your mesh, and i don't have an issue walking through the building walls.
i have found that the physics mesh did need reset from static to dynamic and back to static again, for the mesh to update from another scale. Perhaps this might solve your problem.
Q> Have you tried walking through the wall after a reload of skyline and the scene?
Q> Have you done any tweaks to the mesh using the mesh editor, or was this a straight import from FBX.
Q> Have you tried on a default scene; import mesh; add physics; add fps character?
As for the hay texture, the alpha on the texture is fine, so no worries there
Q> What material mode(basic, advanced or Uber) is the material in?
Note: Basic mode does not have Alpha settings yet, only advanced and Uber.
Note: When changing from basic to advanced or uber, you currently need to select each submaterial and change the material mode manually to the same setting. This is something we will fix eventually, its just this material editor is a fairly new upgrade from its predecessor and was implemented just before christmas, so it is still being developed and may have some bugs.
I did find that the alpha reject was the one to use fr the hay texture. Make sure to save the material after activating the checkbox so the alpha changes to take effect, then use the slider to control how much rejection to use.
let me know how it goes