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I believe that you may need to run the Intersect in Entire Model command before doing surface matching, surface matching only works after the surfaces in adjacent spaces have been intersected and are reversed copies of each other. Be sure to save a copy of your model before running the intersection as this operation can fail some times.
Also, can you clarify your problems with project loose geometry? Which cases fail and how do they fail? It would be good to post a separate question with images for that.