You can read the book of Pranab Gosh, "Rotation and Accretion Powered Pulsars", ch. 2 about this. But this phenomena is something like this: there is a range for every interaction all over the universe. For instance, almost all of the celestial objects are dipole dominated magnets but we don't see that they're pushing each other away (this is not exactly the same case but just an example). So, the Pauli exclusion principle is really a principle but in that kind of circumstances, I mean under such a huge degeneracy pressure and in such a tiny volume, it can not work as usual. All of the particles are lined up in the Fermi surface. In the so-called "well potential" examples as we know that the principle is valid, the mean range is always taken about the atomic range, 10^{-15} meters. For further info, you should read the chapter that I've mentioned above.