Swanson - 1:29 am on Dec 15, 2011 (gmt 0)
This is a mis-direction. Soft 404s are detected fine by Google and as Godaddy are one of the largest hosts in the world then you should expect they have "had a chat".
I host thousands of domains with Godaddy - soft 404 has never been a problem.
To the OP - has this handling caused a drop in traffic or any other reason that you should be worried about - or are you worried about breaking "the rules"?
I often find if there is no problem at the moment then life is too short to worry or change things - because things can change after by google no matter what you do. If it's not broken then don't fix it.