That completely fails to achieve the goal of nerfing same continent colonization, instead nerfing overseas colonization into the ground. It's not a solution at all.
There's something else that was failed also. Namely, the answer to this:
1) Were any nation who could colonize same-continent provinces overpowered because of this?
2) What's the justification for land that is conquered being able to get lower autonomy than land that is colonized?
3) What's the justification for this being a permanent hard limit on colonized land?
Starting from the "need for nerfing this" as an end point is flawed logic. There will always be an option that is stronger than alternative options. The ultimate function of this mechanic is to nerf the following nations:
1. Americas
2. Africa
3. Asia
For the remaining nations, it has no net effect. You yourself claim that overseas colonization didn't need a nerf. However, you failed to ever present evidence as to why same-continent colonization necessarily needed to be nerfed. Despite your claim otherwise, the real reason exploration was top tier 1st pick was a combination:
1. Not only is it necessary to colonize quickly.
2. It is also necessary to westernize quickly as possible.
A colony takes several years to finish and costs money until it does so. The ROI on a colonized province, even with 0 autonomy, isn't nearly as good as what can be conquered in the same timeframe. Therefore, ideas that let you conquer more faster than colonization can be achieved would overpower colonization ideas. Unfortunately, in the new world there is a lot more uncolonized space than owned provinces, so yes because there is no alternative colonization beats not using the land.
The only non-ROTW country hit by this change is Russia. Rather than nerfing Russia, would it not have been better to simply *stop* trashing hordes? I don't want to delve too much into that topic here since it was ducked there too, but certainly this change merits question.
I'm not going to go so far as to deem NA/SA unplayable. I know better than that. That does not, however, by itself lend credence to this change being for the better. Nations like Kochin, Ashanti, and Chimu are playable (and winnable) in 1.7.3. That doesn't mean that they're good nations or that nerfing them would make the game a better experience.
If you had brought up something along the lines of relatively large tax bases, reduced coring cost on permauto provinces, or gone into specifics as to how the changes were altering new world play in a negative way to merit the change, more people would buy in. Simply saying "The Americas are still playable, you should try it" does not actually justify the need to spend your resources on implementing the restriction in the first place, however. Why does this change make EU IV a better game?