Although the "Explosives" shown to Donald and the Rest had really been Holograms created by Sebastian to fool them, they were still able to be touched as opposed to being passed through.
When destroying the Hydro Loop Tunnel and disconnecting the Phone Signal, Sebastian didn't think to do anything to the Hydro Loop's Escape Pod, which is how Donald and Perry were able to escape in Part 2. How was he even able to get into the Hydro Loop Tunnel on foot and implant the Explosives?