It would fix the ship building exploit too.
It would fix the exploit, but make the balance issue worse.
Everyone can do the exploit where they stack 3 governors in a system (eventually). Without it, modifiers cap at -60%, plus another 5-15% per admiral on the council, which is far, far worse than everyone sitting at 90%.
You are playing a fairly generic empire. You have one admiral on the council (your minister of defense), so by the time you have level 5 leaders, you're sitting at -65% discount. Before the patch, you would have been sitting at -5% (the production tech for whatever ship type you prefer).
Your neighbor is a FP.
- In 3.7.4, they get -15% build cost (plus another -5% from the tech). They could make 18% more ships than you from the same alloy (.95/.8). After Interstellar Fleet Traditions, when Retired Fleet Admiral can spawn, they would get another -10% and have 35% more ships than you (.95/.7), assuming you didn't yourself roll governor with that trait.
- In 3.8.X, post-exploit-fix, they get a free -15% and two Admirals on the council beyond what you have (the civic position, and their ruler), for another -20%. That puts them at -100% (capped at 90), so they get 6.5x as many (+550% more) ships than you do. Before they get veteran leaders, it's "only" a 75% increase in fleets.
One can be savvy and overcome a 35% fleet disadvantage. Make clever use of starbases, out tech them, whatever. No one can overcome a 6.5x fleet disadvantage from a near-peer.
tl;dr: Having the modifiers float around -60% for the average empire means every additional build cost reduction beyond the baseline is multiplied by at least 3x in terms of its impact on the fleets you can support. A -15% build cost reduction goes from meaning 18% more fleets to 75% more fleets, for instance.