Penals always had a role. But because cons were a dumpster fire they had to carry T1 builds on their own, et viola, we have the current state of penals.
They're an assault unit deaigned to remove fortifications. That is why they had flamethrowers and satchel charges. The SVT choice was always dumb but what are you gonna do. I agree that they have lost their identity but only because cons were so bad. Their AT rifles, at least, make sense. Forcing soviet T1 builds to ALWAYS have to pick guards for AT is not a good design choice and restricts variety in builds. Similarly, forcing shock troop commanders for bunker removal is bad. We HAD soviets where commanders were mandatory to have a full tool kit and it was a miserable time.
Engineers are also not durable enough to charge anything with a demo charge.
In my ideal design:
Conscript stats stay. As non-doc upgrades they can choose to buy two ppsh, three svt or two PTRS. They are now a versatile squad that can always bring something to any commander, but their upgrades are worse at their job than dedicated squads for any job. They exist to plug any hole in your army build with acceptable and cheap units. Side tech costs are reduced further. The doctrinal packages are upgrades to the normal ones: ppsh cons get more PPSH and maybe 5% RA. PTRS cons get more rifles and the grenade volley.
Give penals a mosin. Allow them to pick either three PTRS, three PPSH or a single flamethrower. T1 now has decent AT and a CQC squad. Penals no longer are just better conscripts and they are only good in close as assault troops.
Remove the guard PTRS. Give them a single DP as default with button. Allow them to buy one or two more DPs. Maybe even reduce their close range mosin damage. They are now a dedicated long range firepower squad and they rely on other unuts for AT damage and defending against CQC squads. T2 has maxims and at guns, t1 has penals, either of them have conscriots as cheap line filler.
Shocks are still damage dealing tanks with smoke and frags. Their simplicity is a strength.
There you go. Elite infantry have distinct roles. Penals have a job and don't just beat cons at all ranges. Conscripts don't excell at anything but they can do a little bit of everything, from sandbags to grenades to merging.
6 men penals with flamer is an incredibly bad idea.