Does it punish errant shots? There's no need for me to even comment on that inane question.
Yes there is a pucker factor on the island, but it's not too hard to hit the center of it from 150-200'. The real pucker hole for me is the one in your avatar. My best of 2 tries is a TRIPLE bogey! The tee shot makes me pucker, the narrow landing zone makes me pucker, the "what is supposed to be your 2nd shot" makes me pucker (although it's always been my 3rd shot b/c of a wet disc)
It's (your avatar hole) a par 4 right? Which should be 3'd if you throw 2 above average shots.
The thing i've noticed with the imaginary course is you have to link 2, 3, and sometimes even 4 ABOVE AVERAGE to PERFECT shots CONSECUTIVELY to score well.