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Increased penalties, but ability to easily increase capacity, as opposed to smaller penalties but no way to minimize them other than one society repeatable tech.
If you're making every planet with one consumer factory, one alloy forge, one lab, one monument, you're simply losing on a good amount of resources.
It is easy to look at the pops working admin jobs and wish that they could be used for something else, but honestly I think that the current system of allowing you to choose between taking penalties or reserving pops to work admin jobs functions fairly well. It is certainly better than having no limit at all, which would kill the tall play style.
And the buildings system is up for another overhaul, so don't get too attached to the current situation.
Lategame to endgame, you're going to both be militarily sound and in possession of enough planets that you can designate entire sectors to specific resources if you so choose. Which means empire sprawl is directly mitigatable with additional planets or habitats within the appropriate sector, and should never be an issue outside of managing freshly conquered territory.
That's how specialities work.
I've always had it on high. AI do declare on each other, but by prioritising stations instead of ship military in the early game I almost always completely avoid being the recipient of declarations. The exceptions are cases where I fail to secure growth space and have stunted growth/limited space with belligerent neighbours.