It's done so the same Penal squad won't mow down the troop leaving cover unless they're in close.
You don't remember rifle company flamers where the rifles would then smoke you out of cover than chew you apart with the M1s? Here, the Penals, need to trade their effectiveness at range so you don't get a squad that constantly removes you from cover while being effective at most ranges against other rifle infantry.
Rifles had quite a lot of stuff that penals miss.
Durability with vet being most important here, but contrary to rifles, penals are extremely vulnerable against light vehicles, 222 rips them a new one and they are completely helpless against it.
You will never see as much penals as rifles for the sole reason they lack all the utility needed by main infantry, you still need conscripts for AT nades, you still need guards or fast T2 for AT, you can do magic with rifles because of their nades, AT nades, smoke, capt buffs, penals have none of it, flamer was one reason why elite rifles were op, but it was hardly THE reason.