Doesn't seem like the news has filtered through to here yet, forgive me if I'm missing it already being discussed (still early for me, not enough coffee).
Microsoft has already acknowledged: the SB2 power supply doesn't provide enough power to run the CPU and GPU (particularly the GPU) at 100%. It's rated at 102 watts (listed as 95 watts in the specs), and the Core i7-8650U (20 watts TDP, slightly faster than usual) and GTX 1060 (80 watts TDP) by themselves pull 100 watts. Toss in the RAM, SSD, display, and other electronics and there's just not enough power there.
So, if you slide the performance slider all the way to the right, the system runs flat out and it will discharge the battery to keep up for a certain time period. Then, it will throttle things back to keep power draw under what the power supply can provide. If you slide the performance slider to the middle or left, it will throttle everything. You'll know it's working because the fans will ramp up and down accordingly.
Microsoft could have gone with a GTX 1060 with Max Q and avoided this, but they're just essentially achieving the same thing as Max Q only not as efficiently -- they're throttling the GPU and probably achieving the same performance as if they were using Max Q out of the gate. Maybe they're not getting quite the same performance since Max Q was engineered for this.
Now, Microsoft is essentially backing off on the claims of this being a gaming system. It's not. It will do great with creative applications that use the GPU, because those tend to be intermittent. But modern games push the GPU 100% over extended periods, and the power supply just can't keep up. Maybe Microsoft knows the thermals also can't keep up, and that's why they did this. Or, the Surface Connect port can't handle more power than this. Nobody knows the specific answer. Microsoft is saying all of this is by design.