0.02 infany is "a monthly, very severe penalty"? I too would prefer this penalty to apply to everyone, not just member states. If you limit yourself to one province at a time, even a monarch Cursed by God will give a net infamy reduction. A mediocre monarch could handle two provinces at a time. This is a game of over four centuries; there is no need to starburst across Europe in a couple decades.
-Pat
Well, imo the penalty is severe. Limit yourself to two provinces every 50 years, sounds like a lot of fun really... not (I know you can still inherit and expand outside the hre or leave it). If you like such a static gameplay ok, I don't, question of taste I guess.
But I really don't get why anyone would want this rule being applied to all states. Logically, it makes no sense. Right now it actually even makes barely sense for member states, since infamy is a world wide stat but why would Japan care about HRE members crushing each other? You could argue maybe that attacking neighbors with whom you are in such a special situation simply upsets other nations, I might be ok with that. But France? It seriously makes no sense at all why other nation would go bersek on France if they annexed too many HRE members but don't if they annexed a ton of other nations.
Maybe introducing a new stat would be a better solution for this problem. "Relations with HRE" or something like that. This would better reflect both, HRE members getting in trouble for wildly annexing and forreign nations trying to get their slice of the empire. If you applied the infamy penalty to all states, Spain would try to punish France for annexing HRE provinces. And I really don't see why Spain would care more about that than France annexing north african provinces.
Edit: Just thought about how many provinces you might be able to annex. Let's say you play 400 years. That would make eight "rounds" of provinces. To avoid net gain of infamy, you'd probably have to restrict it to two provinces per round. Makes 16 provinces. Now, if we calculate with four infamy per annexed province and an infamy cap of 35 you could actually just annex eight, maybe nine provinces, since you can't really lower your infamy while having two non-core provinces. So even with some boarder issues events, it looks pretty bad actually. Keep in my mind that if you expand outside the HRE this might still very likely increase your infamy significantly which reduces the amount of possible annexions within the HRE even more. So yes, I think this penalty is severe. You'll probably just end up leaving the HRE.