So on Deity I tend to get 81% penalty for taking one city, and I suspect I'll have an 81% penalty for taking 100 cities. So it doesn't really discourage heavy warmongering. It discourages light conflict.The main problem with lowering the anti-warmonger curve is that it weakens its effect, and again even with its current strength there is still concerns that aggression is the best path in many cases. That's the issue to me, as much as I don't like the penalty, it seems sorely needed to keep warmongering in check
It also makes Lebrensaum the best tenent, because by extending your own land you can avoid the penalty. I use all my GG for citadels, because blocking an 81% penalty matters so much more than the 15% they provide.
For a long time we had X% penalty per extra capital you controlled, scaling with difficult (I think Deity was 8%). That penalty was enough to have a big impact. Really the only flaw here was the skip capital gimmick (which has downsides, for example if the capital is a holy city you often want to take it either way).