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No, it does not in fact inflict a penalty. Happiness changes do not happen immediately in any case, and any change you are seeing does not come from something you just did. At best, what you would be seeing is the settlement correcting the numbers because of a display error.
As for the cheating....well some game mechanics are so obnoxiously wrong and bad it encourages the cheating. The happiness system in Fallout 4 is one of those things. Yes, it can be cheesed with a settlement of 1 or 2 settlers, but that aint really a settlement either. The achievement description also does not really help either as almost everyone tried it with a large settlement.
https://www.nexusmods.com/fallout4/mods/11134
No, the fastest way is with a single settler and a single level 2 food stand. If you want to use cats and you have 6 or 7 settlers, you would need to capture a dozen cats. Or only 2 cats if you have a single settler.
Getting cats also requires a DLC (Wasteland Workshop). If you don't have any of the DLCs, you need to use the stores or get lucky and come across the guy selling his dog. Having the Wasteland Workshop DLC (for the dog, cat, and gorilla cages) or the Vault-Tec DLC (for a number of happiness producing items) makes the achievement easier to get.
Admittedly if you have no DLC your way is best.
Because enabling mods disables achievements