(speaking about vote penalty only, not about the effects on the author)
Actually, the change did something here. People were less motivated to set auto votes at exactly 0 minutes with this change, thinking from the perspective of curation reward maximizers. You have to act in accordance with how you believe similarly minded autovoted voters would, based on how much of the penalty they were willing to take.
Most users don't even get a chance to vote in this early window anyway, so that's why I don't really see this as a problem. And for those that do, that's where this reverse auction is useful. Otherwise you have this "which bot got their vote in first mechanic" that makes things completely chaotic.
But you're right. This system is probably too complicated. That square root curve for curators is pretty much what motivates this "bot needs to get in first" rush. But I don't really see a way out here. Without those rules, a large staked bot can take all the curation reward for themselves. With the window, others can sneak in before the bot potentially. And changing the curve to be less exponential might work but doesn't address the bot vote at exactly 0 minutes.
Upon looking at this thread I think it got jumbled because there are two talking points here: effect on the author and people that want their vote to go to the author, and why there's a penalty window to begin with (which in the previous change were related as well)