Why change it though?
That would be spitting on the accomplishments and sacrifices Penal units committed to, under very difficult circumstances.
Penal units pulled off some fantastic accomplishments of bravery and soldiery. Many of the assigned individuals where only guitly of simple "political" crimes, as perceived under the pervasive ideological atmosphere of the time (more or less globally, in different forms). At best, they performed amazing successes, even under duress, at worst, their death was nonetheless in the service of their nation and war effort (especially if unduly commanded to suicide missions by an insane officer, which makes them martyrs nonetheless).
Why change it? Penal units accomplishments and sacrifices where real and important, and under very difficult circumstances.
Because penalized criminals will fight better than the whole of the Red Army. Thats a massive insult. A unit of real status can perform that way, and penals can perhaps be in a commander where they are even more useful than they are now.
I dont remember this game because called Company of Penals. The point of this game isnt to glorify Soviet Penal Troops as the best stock infantry the Soviets have available. Why cant there ever be some real Russians who know how to shoot? Its like every conscript is in his first battle, and hasnt had any experience at all - but this is for every game. Conscripts do gain experience, or else there wouldnt be Guards.