Google's response is spot on. Fundamentally, it cannot return "10" if "10" isn't even a category that it was trained with. Classify is basically a set of supervised machine learning algorithms.

Looking at your input data as a human being, I would (understanding the input to mean what it means to the Classify) return 1 as well.

If you want to understand what Classify is doing, you can see what methods it chose using the ClassifierInformation function. If you do, you will see that Classify is using a series of markov chains, and that's not going to do what you want.

You are asking for an algorithm that can robustly handle recognizing sequences with "anything related to permutations, shifting, changing, organizing, reordering, etc. of the data". I would encourage you to take a look into different machine learning algorithms, both supervised and unsupervised and see what kinds of properties they have. What you are asking for here, is not reasonable to expect from a generic ML algorithm.

If you've discovered a "Massive Flaw in All Machine Learning Algorythims", it is that they less magical and intelligent than they often appear at first. Classify is by far the easiest to use ML tool I've ever seen, but if you want to push it beyond its conventional uses, you must understand how ML algorithms work and what their limitations are.