The penal battalions where intended as elite (doctrinal) infantry in the first iterations.
I don't remember this going back as far as beta... I can never think of a time they were doctrinal. Powerful, 360mp long range units, yes, but not doctrinal.
The original T1 design intended to be a structure that gave you access to elite units; guards, shocks or penal troops. This changed during the development cycle (call-in units) and caused the awkward position of the T1 structure. by buffing penals to elite troop level you conflict with the original design and allowing the soviet player to have access to two different elite units.
What I remember was Penal Battalions being replaced in T1 by Guards or Shocks once you chose a doctrine. In the early days Penals were often meant to be replaced, Guards and Shocks were meant to be built from T1.
Then the call-in switch happened, sniper clowncar removed, and penals were adjusted. (And then again, and again, and I think again. I can't remember if the reversed flamer+PPSh upgrade was just a preview patch or not.)
But quite frankly, I'm not sure what the point of having t0 conscripts would be with this version of T1. Especially if this proposed unit gets all the conscript upgrades and doctrinal abilities.