when is a curvature continuous surface really c2?

I have a SW surfacing question for the SW gurus

It seems the continuous option SW offers for the various surfacetypes is not really continuous or perhaps there is a problem withthe porcupine curvature display?

I attached a simple surface model to show this.
I created a simple lofted surface with compound surface. I cutsquare hole thru this surface. I created surfaces to fill the holeusing each surface tool SW offers for doing such things.....fillled surface, boundry surface, and lofted surface. Icreated an intersection curve thru the center of these fillingsurfaces and turned on the curvature display for each. Thecurvature display indicates that the surfaces are not curvaturecontinuous.

Is this really the case or I am I missing something?

Cheers
sw 2008 sp5SolidworksSurfacing