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Yes, it can be penalized, but most of the time it will not. On the other hand, one can show different languages in a way that Google likes, and even have the Chinese language one be a "denied" page.
Geoip is FAR from exact. I don't recall the exact numbers for country. In their city database, MaxMind claims 80% accuracy outside of the US, meaning they are wrong 20% of the time. That matters because just because you say to block a certain country, that doesn't mean that is all that's blocked.
Google penalizes what appear to be possible spam redirects, where the SE gets one page but surfers get another. You likely know that, but a quick search will turn up references. In order to detect that, Google must compare what it's normal spider gets versus what happens when they pretend not to be Google, coming from another IP. We know that's true by deduction - they MUST compare in order to catch spam redirects. If the other IP they check from happens to come back as blocked or redirected, that's when it's a problem. If blocked, Google may see the site as down. If redirected, that looks a lot like a spam redirect. Most if the time neither IP will be blocked or redirected, but it can happen.
The alternative is to act based on language rather than probable location. The browser tells you which languages the user prefers. Based on that, you can use mod_negotiation to either show a straightforward translation in the right language, or you could have the Romanian language page be completely different from the English language page. Google likes that because in that case they ASKED for different versions of the page.
Similarly for TGPs etc. - if you block Turkey a Turkish TGP will think your site is down. A US TGP owner won't know Turkey is blocked. Except that the TGP webmaster might might actually be in the UK and they are blocked because Maxmind THINKS they are in Turkey. With geoIP it's always "might have" have and "might be" - you might have blocked some people who might be in China.
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