So you're basically saying that instead of having a negative mark of X for 30 turns, you have like a negative mark of X/n, where n is the number of turns since the mark was initiated? So one civ who ends the period of their denunciation isn't affected by their ally also denouncing you?
I like the decaying penalty. I'm reasonably sure it already works that way for the warmonger penalty, but not for denunciations.
Not exactly, it won't change either how denunciation works or how warmongering penalty works... it's just its own modifier that offsets the denunciation incentive. So, if an AI is friends with 6 others, who are all chain denouncing you, that's something like a +60 for the AI to denounce you again, even if it has zero problems with you or what you're doing... so it probably will. On the other hand, you can give up to -40 diplo worth of gifts (maybe -30, I forget), the Embassy is like -5, if you propose a resolution or share an ideology or religion or whatever that's much more, share some intrigue, and it all adds up to sort of evening out, but having an additional -20 would definitely swing the balance back in your favor. Once you get one friend who's friends with the other AIs, you can break the cycle.
Basically, the problem is right now it's often literally impossible to work your way back, because +60 from chain denouncement incentives AIs who like to play nice to endless denounce you, even if you share no other negative diplo. Adding a short-term one-time bonus for reforming makes it actually possible to come back (although, you would still have to work at it, and probably give gifts).
The denouncement chain comes from the idea that people like to gang up on a "Villain", which is true. Consider how the Mongols or the Huns were portrayed in places that had no direct contact with either group. I want to keep that as a factor in the AI decision making, but to also allow for the warmonger to stack positive diplo modifiers to come back from the hole. Right now, Ideology (paired with other positive modifiers) is the only thing powerful enough to sway an AI to step back from the chain denouncing. That shouldn't be absolute. The offset diplo bonus would, for a short period after each AI thinks you are no longer a warmonger (or whatever other bad thing decays) offer you a window to make amends and get in the AI's good graces to break the chain for that AI (and the less AI in the chain, the weaker the chain is for all the other AIs).
It allows for the game to be more dynamic, and as a consequence, it will penalize limited amounts of early war less in the late game than the current system, while keeping the penalty during the era of aggression (or counter-aggression), and for however long the AI cares about the aggression, the same.