I’m not sure bit size will make a difference on this. The fibres rip instead of cut because they’re wet. I think on an industrial scale the way they do this is all the shaping first and then send off for pressure treating. I have had the same issue with PT which will neither rout nor sand well.
The advantage of doing it this way is that you can shape the timber and and have it all cut ready for assembly, the treatment solution will penetrate all the cut edges as well.
I don’t know what’s available where you are. There’s a timber mill in my village that makes fence stakes and rails of all different sizes with a vacuum chamber on site – if you have one locally, ask if you could get a pallet of stuff treated.
Alternatively, if you know a joiner who makes sash windows, find out how they get them treated.
As it’s probably already too late for this consignment, I’d try rounding all the edges first and then leaving them out in the sun for a day or two, then try going over them again. They might take an edge better if they’re drier.
Good luck!
-- Do or do not, there is no try