If memory serves me right the penal buffs was a reaction to vg buff and maxim nerf. The op maxim back them kept volks in check. The maxim after its nerf became incapable of doing anything resembeling halting inf movement. Both cons and penals (wich to my recolection still where the 270mp up version) could not hope to fight volks esp after their stgs upgrade.
It was also in response to taking away penal flamer and giving them unique role in the army instead of stronger cons with no utility at all.
Penals were reworked after been useless for 3 years (270mp with flamer). They were basically changed into stronger Rifles with flamers and oorah. And although the tier had 0 AT, Guards were cheap and strong enough to make the transition later.
On that same patch, OKW was reworked. Volks had their PS removed and given an STG and Faust instead.
Maxim spam would remain a strong option, specially against OKW, till they basically nerf them several times through different patches.
Current Penals with PTRS became a thing after they removed the flamer and they tried to make the tier to be something less reliant on cheese to work.
Sniper were reworked into 1 man on top of removing the whole stealth cheese mechanic, OKW was already given a snare to eventually deal with clowncar and Penals and Guards would see different nerfs till the version we have nowadays.
Conscripts were decent on 1v1 against OH and irrelevant against OKW PRE REWORK unless PPSH and spam was used.
Cons post OKW rework with STG Volks, were useless.
Funny enough, there was a Conscript change which made them more "reliable" by changing the damage profile of 16 to 12 (while retaining same DPS, same change as with IS) and giving them more power in the late game by buffing the vet. In combination with the muni increase on lolotovs and oorah, it was just a shift in power from early game to late game via vet.
This change didn't help at all against Volks in the midgame (power spike on STG).
What this changed produced was an improvement on a pocket strat with PPSH which was just better against OH (which later got nerfed by increasing the cost).
7 men conscript is NOT a reaction to LMG grenadiers. Conscript/Grenadiers balance was established years ago and it was working.
7 men conscripts are byproduct of Penal/St44 VG buffs and it currently OP.
7 men Cons are a byproduct of USF, UKF (which lead to changes and buffs to OH which in result change the dynamic with SOV) and OKW merely existing. Pre and post rework on whatever faction.
PD: the upgrade is on the OP side but nothing small nerfs/remove features might not fix.