I don't understand why some people are so hostile, I don't know the poster, I don't care that someone attacks QF (they're a big organisation, they can take the occassional bad word or two) , a patient explanation might go a long way rather than simply asserting one's superiority. If the OP doesn't come back. So what? Someone else might read something and learn.

There are two issues, most have addressed the first issue of not allowing to "skip a sector". Something many people do not know, that skipping a sector will cause the ticket to be cancelled. Many assume OK, I've got a ticket from A to B to C, so what if I skip A to B? The airline saves money that way. They don't realise they could be paying less (ad sometimes a lot less) than someone traveling B to C. Many outside the commercial aviation geek world may not know this.

On the second issue, of not allowing cancellation of the PEN-KUL-SIN sectors, it's surely more complicated. If travel has commenced on the ticket already, according to T&C, then the OP can't cancel or change any sector (other than date changes), cancellation only allowed " prior to commencement of any travel". However QF are willing to cancel the SIN-SYD sector if the KUL-PEN-SIN sector is cancelled, so that would suggest travel hasn't commenced on the ticket, and thus cancellation is indeed allowed. This therefore implies hidden city ticketing ...

One thing I was unaware of that hidden city ticketing actually applies to award bookings across different airlines. It would seem from the advice, that the OP can cancel PEN-KUL, which would be on MH, so no hidden city ticketing there (completely different carriers). I therefore assume KUL-SIN would be on 3K, not MH, which must be linked to the SIN-SYD sector. I guess, although different carriers, and an award ticket, because of the ownership structure, hidden city ticketing may be an issue here,. It would be 28K for the KUL-SIN-SYD journey, but the system mustn't allow dropping one sector and repricing of SIN-SYD (even though it would be the same 28K) and therefore need to cancel the whole ticket.

Or maybe on solution (not offered so far) is HUACA. You never know!