7. The presence or movements of the civilian population or individual civilians shall not be used to render certain points or areas immune from military operations, in particular in attempts to shield military objectives from attacks or to shield, favour or impede military operations. The Parties to the conflict shall not direct the movement of the civilian population or individual civilians in order to attempt to shield military objectives from attacks or to shield military operations.
8. Any violation of these prohibitions shall not release the Parties to the conflict from their legal obligations with respect to the civilian population and civilians, including the obligation to take the precautionary measures provided for in Article 57.
Which means that by illegally putting human shields in place, the violators effectively do "render certain points or areas immune from military operations."
So once again we see how international law can itself turn into a weapon that international law is ill-equipped to combat. Not only that, but it is clear that the international community will only hold Israel to its obligations under Geneva, and not the PA.
As far as whether civilians who voluntarily enter the field of battle lose their protected status or their status as civilians, it seems not. Unless they put on uniforms or take weapons with them it appears that they remain legally civilians. This confers a huge advantage to a combatant that ignores Geneva, as the PA regularly does. The chances that the UN will penalize the PA, or that the World Court will try Hamas for violations of international law, are remote.
I would argue that this is a textbook case where the law is not on the side of morality. Geneva hamstrings any parties that abide by it and aids those who willfully ignore it. In this case, it is accomplishing the polar opposite of its purpose. And the biased position of the international community ensures the immoral outcome of this imbalance.