Yes, penalties have pretty much been turned off now. Only when you bump someone hard off the track you still get a (smaller) penalty. Which means less penalties served during the race (which caused more incidents) and less people dropping to the back from penalties and forcing their way back to the top (which caused more incidents). So pretty much by no longer penalizing dirty driving, driving has become less dirty over all, or rather races have become less chaotic.
You still get SR deducted though, yet since there's now less movement in positions (due to less penalties being served and fewer fast people muscling their way back) there is also less contacts during the races.
It seems weeklies have also reduced the number of active sport players, which means the difference in speed between people entering the races has increased, which also means fewer chances at contact. That combined with people that do play now know the tracks better and get better at staying on the tracks, which means less incidents.
So indeed, by chasing people away and allowing dirty driving, PD has succeeded in turning the races more or less into organized parades after the lap 1 dust settles.
For my style of not qualifying and racing from the back, the higher spread in DR in races has been 'catastrophic'

I'm no good at Interlagos, driving there the whole week in a sprint race, well see for yourself:
Just wait until Nord or N24 is on all week

I'll be close to A+ at the end of the week, even without qualifying. It could still be months before that comes on though with 3 races a week...
Btw, I'm racing much less since the change as well. My average sport races since release was 13 a day. I hardly do half of that with the weeklies.