I always thought the penalty marking was a good thing as it showed that if you don't know the answer you would go and find out rather than guess. As a maintenance engineer guessing is not a good thing.
Also I think the oral exams were a good way of ensuring that the candidate had a good command and understanding of english and the subject, and had the right character.
I believe the dropping of oral exams was along the lines of, "when was the last time someone failed an oral exam"?
When I took my BAC1-11 type rating oral I didn't fail but was told to go away and gen up on the pneumatic system and the surveyor would ask me about it when next in the hangar. About a week later I saw him in the hangar and approached him about it. He asked, "all genned up now"?, I said yes and he said, "Well done", and that was that.