Is Google's Penguin Update a Penalty?

This is something I get asked fairly frequently at work and online. While I can agree that this feels like a penalty it is simply an Algorithm update. Specifically speaking to Penguin it was an update that judged external links to determine quality sites and content. Because of this review a lot of sites took a dive when it came to there SERP's. This dive could have been a multitude of things from referring links anchor text to link context and so on. 

Google Penguin 3.0 Factors

• Low Relevance Links
• Duplicate Links
• Directory Links
• Poor Link Ratios
• Poor Link Diversity

To further this was what came during the prolong delay of another penguin update. During this time I conducted manual reviews of hundreds of websites and discovered a few things that plagued penguin victims. 

In very few cases did I find it was only one of these factors that affected penguin victims. Most of the time it was the culmination of a few of these issues. Another resounding issue that was frequent in competitive markets, was the lack of a brand. Meaning that links coming in rarely included or had mention of the business name or brand. It is my hypothesis that this was a bigger factor than indicated given that brand mentions are natural despite their lack of context relevance.

The Long Awaited Update

Finally a little over a year later Google updated their Penguin Algorithm on October 17 2014. This refresh came as a big relief to a lot of website owners as previous ranks began to return. This seemed to occur whether people applied fixes or not to their website. Which leaves me to believe that everyone grounded out by the previous penguin update was judged with poor links. Due to this judgement they were not able to obtain the rankings they previously had. 

The Conclusion

So in short I can see where the penguin update on October 4 2013 could have been perceived as a penalty. However we have to ultimately keep in mind that it was an algorithmic update that simply leveraged judgement when determining SERP placement. Because of this some people lost their momentum while others gained during the update. With a refresh the judgement were potentially lifted or lessened resulting in rank returns. 

What do you think the Penguin 3.0 was?