Hi Faizan,
I am not sure how the standard program works when we select multiple person in the Search help of person assignment when the option is given. Once I get some availability, I will debug the standard program and let you know but as of now I can say it works when you select one person at a time.
Also as mentioned in the below SAP Help link - The idea is that, in the specified Work center (i.e., org. unit or group of personnel), certain no. of personnel works for a given time in a day. But this work center can have no. of personnel more than the capacity.
Assigning HR Objects to Work Centers - PP - Work Centers - SAP Library
Taking your example - The work center has the capacity of 5 personnel, but it can represent a group of more than 5. Reason is that it is highly possible that all 5 personnel assigned to the work center may not be available at a given point of time and the project manager / business user may have to juggle as per the availability of resources. So you may consult with business regarding this logic otherwise the enhancement is the only option to restrict personnel assignment to work center.
Best regards,
Aditya