The rule unfortunately doesnt give any penalties with the rule on. It only gives bonuses to halfings, rogues, and warriors.
Code:
if(RuleB(Character,UseRaceClassExpBonuses))
{
if(GetBaseRace() == HALFLING){
aatotalmod *= 1.05;
}
if(GetClass() == ROGUE || GetClass() == WARRIOR){
aatotalmod *= 1.05;
}
I guess it wouldnt be too hard to modify this for real exp penalties though