The Multi-Hit perk gives a 40% damage bonus when you hit multiple people in a swing on the second, third, fourth guy, ect. It's intentional.
It's not exclusive to axes, either. I've done it with a smithed war scythe (Polearm, once killed three dudes in a swing when I galloped past clashing infantry lines) and a war razor (Two handed sword). Basically if the weapon is long enough and the second/third/fourth guy doesn't block your swing will carry through with a damage penalty. The Multi-Hit perk negates some of this penalty (Though it seems that with it you'll hit guy #2 with 100% damage)