PPSH is definitely a downgrade of regular SVT Rifles, and they purposefully synergise poorly with Flamer which can't fire on the move. Penals also have less durability through vet scaling compared to Penals in Live. PPSH Penal Flamers are situational instead of a no-brainer complete upgrade like the previous Flamer Penal.
Yeah close range dps is situational, but when OKW has no viable suppression, it is a very unchallenging situation to happen. The abundance of flamethrower options for SU without a viable way for OKW to dictate range via suppression or smoke is a problem. You constantly have to kite your infantry away from mid-close range, where stg volks are supposed to be good. And it works I guess, I'm not saying they are unable to be beaten, but I'm personally bored of not having viable tools except sheer dps. I will continue to play regardless.
My recommendation is to just avoid any squads having flamethrowers in general besides the engineers. That + molotovs + satchel + sniper are SU's soft T1 anti-garrison. That's more than OKW or UKF get to work with