It seems to me that the 2 minutes penalty is extreme severe.

I dont like the change of rules after the start, but in this case we will get the final points of first puzzle just tomorrow evening. (GMT)

I suggest a 20-30% penalty instead of the fix 2 minutes. I think it would be more correct.

(And in this case I think it is better, if the penalties are added and not multiplied. For instanse 2 mistake is 40% (x1,4) instead of 44% (x1,2x1,2) )