After trying the mod, I think that penal battalions r absolutely OP.
I have an idea to make a difference: everybody knows that penal battalions r accompanied by other friendly units; thus we can establish a new setting that each penal battalion squad must be supervised by 3 conscript squads.This means that only when the soviet player owns X conscript squads can he/she own X/3 penal battalion(s), where X≥3.
This change must be cool.