The current situation with the UA draws better parallels with the Vietnam war and their Conscription/Draft than this concept of a penal battalion.
I lack expertise but the Vietnam war showcased the US militaries breakdown in the quality of the average soldier. A choice quote I found seems to illustrate this, "By every conceivable indicator, our army that now remains in Vietnam is in a state approaching collapse.... The morale, discipline, and battle-worthiness of the U.S. Armed Forces are, with a few salient exceptions, lower and worse than at any time..."
This reality. That the United Americas is not only in a Cold War with the UPP, dealing with an insurrection across their outer colonies by the CLF, but now also contending with a seemingly encroaching invasion by the Xenomorph threat, is putting overwhelming pressure on the Colonial Marines. To the point where you legitimately could have people refusing to enlist for not wanting to be sent to fight lovecraftian nightmares that annihilate entire worlds, which would justify the introduction of mass conscription to bolster their ranks.
This reality, seems much more authentic to justify the lower quality and calibre of the Falling Falcons, a battalion consisting of everyone from eager. but green recruits, to scared shitless conscripts who'd rather by flying to the next Galaxy.
That seems far more engaging that than the United Americas reverting to the 18th century and using Penal Battalions, which is nothing more than a Warhammer 40k lite idea that makes no logical sense for a country based off of the United States of America and Canada.
---------------
I could legitimately see the idea of Penal Battalions being used in very, very dire circumstances, such as a full on invasion of Earth by the Xenomorphs, and the UA being involved in total war with the UPP, whittling the capabilites of the USCM to the point where they may have legitimate need to force prisoners into combat. But even that's a stretch.