What I beleive is happening is that the Size of the Panel will be determined when you do PerformLayout on its Parent. You can make it work like you are wanting by moving the panel's parent SuspendLayout / ResumeLayout
code into the Loop.
int yPos = 0;
foreach (String entry in entries)
{
this.SuspendLayout();
Panel panel = new Panel();
panel.SuspendLayout();
panel.AutoSize = true;
panel.AutoSizeMode = System.Windows.Forms.AutoSizeMode.GrowOnly;
panel.BackColor = System.Drawing.SystemColors.Window; // Allows to see that the panel is resized for dispay
panel.Location = new System.Drawing.Point(0, yPos);
panel.Size = new System.Drawing.Size(this.Width, 0);
this.Controls.Add(panel);
Label label = new Label();
label.AutoSize = true;
label.Location = new System.Drawing.Point(0, 0);
label.MaximumSize = new System.Drawing.Size(panel.Width, 0);
label.Text = entry;
panel.Controls.Add(label);
panel.ResumeLayout(true);
this.ResumeLayout(true);
yPos += panel.Height; // When breaking here, panel.Height is worth 0
//yPos += label.Height; // This works perfectly, label.Height was updated according to the text content when breaking at that point
}
this.PerformLayout();