This is something that really, really depends on the house rules. In any game run under TDA rules this violates Rule 33 (it'd be classified as soft play / collusion thereto) and the players responsible would be penalised.
Probelm is, the TDA rules aren't universal. So in cases like this you really need to refer to the floor person / tournament director / equivalent and ask for their rule.
Just curious since its not allowed is their a penalty for collusion? What would you do if you had money in it and someone was doing this but it was not online or in a casino?
If it's verbalised then yes there should be a penalty.
The problem is that the penalty won't help you in
this hand - if one is given, it'll take effect after the hand is over. So if you get knocked out by one of the colluding players, they may get a sit-out penalty starting on the next hand but you'll still be out of the tournament.
The penalty will most likely be getting sat out for a period of time, BTW. Exactly the same thing that you see on TV at the
wsop when a player gets a penalty for swearing (like in the infamous Matusow / Sheiky incident at the 2005 Main Event). It's also possible they could just get a verbal warning, if it's their first offence or it wasn't deemed a major infraction or something.