haven't played balance mod, but p much everything wrong with penals came from their horrible scaling and shitty vet
they don't need to be USF rifles, they just need to not be terrible manpower sinks. cons are handy to keep around for soaking fire/warding vehicle flanks/clearing garrisons even if late game their damage is negligible.
every point of manpower you sink into penals becomes next to worthless lategame because they die so fast + cost so much, and you more or less need to use guard doctrines with them since T1 has no access to light-AT.
Riflemen are the most OP infantry in the game at the moment. Now that vet works properly they should have their buffs from last year reverted, including the zook accuracy.