1. Set panel to auto-hide
2. Set HideUtilityWindowsForInactive to unchecked/false with Systemsettings -> Window management  -> Window actions and behavior -> [ ] Hide utility windows for inactive applications. This setting changes $HOME/.config/kwinrc [Windows] section setting HideUtilityWindowsForInactive

This setting makes panel auto-hiding stop working. It reappears switching between windows by clicking on them or by changing with alt-tab and then it's stuck, forever, until mouse pointer is hoovered over the panel.

Changing HideUtilityWindowsForInactive back to true fixes this. However, having this true hides the utility windows - as intended. These windows are sometimes useful, smplayer's playlist is one such window. Open smplayer and the playlist and dolphin and try to drag files from dolphin to the playlist with this setting and You can't because the playlist is gone the moment you click dolphin. There's other reasons why I don't want this setting. 

The current situation is that I can use a kwin setting I don't want and have auto-hiding panel(s) or have working auto-hide and utility windows go away when I need them.

XFCE4 does not have this problem.

While kwin setting is what triggers this it's probably an effect of plasmashell/the way the panel works.

Please let me know if I can provide more information and how to gather it if that is the case.