I don’t know about the particular design this guy is using but some have metal prongs that are designed to penetrate the fur and make direct contact with bare skin.
And I know someone who tested one of those models on her leg while wearing jeans. Even with that level of protection the lowest setting gave her a major jolt that she–an experienced dog trainer–said could cause a dog to panic and attack the nearest person.
So that might explain the experience of @Papasan’s neighbor.
Oh yeah, dogs wearing these will often yelp which will then just set off the shock again, creating a dangerous loop.