Penalty fees are configurable on the membership type level. This means that membership contracts inherit their penalty fees from the membership type that it's associated with.
A no-show or late cancellation will always result in a Class Usage loss regardless if Penalty Fees are turned on or off.
Enabling/disabling penalty fees
Navigate to Products from the left panel > Memberships > Membership Type > select Edit from the membership options.
Scroll to the Penalty Fees section > toggle the green dot to the right to enable & to the left to disable this feature.