The reasoning behind that is that people abused contact to get free shortcuts. A well known approach on Monza at the 2 chicanes. Brake check the car behind or turn in on them when side by side to force contact, then skip the second part of the chicane entirely. This will give the other car a penalty while you gain a massive time advantage.
It still works in other situations as well
Contact, full power along the wall, wall riding pass without a penalty.
The game needs to detect 'booting someone off' instead of looking at who gets off worse. And certainly look longer at the after effects than the one second or so it does now. If you got punted at T1 on Tokyo and don't hit the wall until a second later even though you were sent to the point of no return, you get SR Down (for gaining a speed advantage) and 5 sec wall penalty.
A general penalty system doesn't work. It has to be tuned for every track, every part of the track and every car. The game needs to look at where the brake points are (and thus the braking zones) for different cars to figure out who is at fault. And the track layout as well, chicanes, hairpins, tight corners, long sweeping corners all need to be treated differently.
Then there's 'doing the right thing' according to the etiquette videos and still getting a penalty for it. If you void a car screwing up or spinning out but can only do so by touching a wall or going off track for a bit, you still get a penalty. The game needs to look at the why, not just at the what happened. It's a pipe dream though. Calculating your only options in any given situation from the moment a dangerous situation arises is probably costs too many resources. The AI sort of can, they avoid you in single player, so the game can figure out what you should do to avoid. However the AI is far from good enough to apply to online racing to say who should have done what.
Hopefully next gen we'll get an improved penalty and SR system It's still better than nothing but sure can be frustrating at times.
Yep, the game doesn't look at other traffic. I missed my braking point once, got reset, no one around, lost 9 seconds on my lap time, still 5 second penalty for hitting the back wall. Oh well, it teaches you to be more careful. Although in qualifying it should simply invalidate your current (and next lap if it's the final corner) instead of penalties.
Luckily there is no trophy or any benefit to fastest laps as they can also easily be gamed, penalties don't count for fastest lap. The trophy for nr of wins already causes enough trouble.