Well there's no particular reason for a textbook problem to actually model a physical system... But one can certainly write something like this as a completely valid approximation. Take Flugge's example, with He3 so its fermionic[fn.2]. Say the size of the atoms is very small, much smaller than the scales on which the ground state wavefunction varies, which is reasonable enough.
Now there should really be a term $V_{repulse}(x_1-x_2)\psi$ where $V_{repulse}$ gets really big when $|x_1-x_2|\rightarrow 0$ to capture the fact that you can't put the two atoms on top of each other [fn.2]. But this is going to be really short ranged, almost zero if $|x_1-x_2|$ is significantly bigger then the size of the atom. On the other hand we know that $\psi(x_1,x_2)\rightarrow 0$ when $x_1 \rightarrow x_2$. So in precisely the region where $V_{repulse}$ would matter, $\psi$ is basically zero. So we can basically ignore $V_{repulse}\psi$. More exactly, the term is proportional to (size of atom)/(size of circle) squared, which could be very small.
So you don't always have to include a repulsive term. It can actually be quite negligible, even though it seems like a fact you can't ignore.
[fn. 1] There are also times when you can ignore the repulsive interactions of bosons, although its not suppressed like the fermions.
[fn. 2] Its not really true that it should diverge as $x_1\rightarrow x_2$. If you really got the two atoms on top of each they would stop behaving like pointlike atoms, so your model would stop being applicable, rather than anything going to infinity.