One problem is that there are many heated fights with lots of bots on each team, and often it's impossible to avoid hitting a team mate by mistake when all bots or players make a pile in the same place and shoot each other. It's quite unpleasant to find yourself suddenly exploding because you hit a teammate by mistake, especially in non-TDM team games where you might be heading for a key, domination point or flag and loose it just because of a forgotten rocket or grenade that hit a teammate.
A second thing is that well, this also seems to me a bit too exaggerated somehow and can't see its reason well. As long as friendly fire is disabled and the teammate takes no damage to your shots what's the reason to punish the player like that for a mistake? It's also totally unrealistic too imho... it's not like you have a magical bonding to all of your teammates so all their damage goes to you if you shoot them (sometimes I find that funny cuz it looks like God is blasting you for your mistake or something like that

Personally I'd really really love to see this go. The camping damage penalty for Last Man Standing is one thing I agree with and it's a very good system against campers, but this is really not what I think someone would want in a team game. If this is there I guess it was probably made for some reason though, so if there's a strong reason for a penalty like that maybe it can just be changed to something else. For example, instead of being damaged on friendly fire change that to loosing a frag if you shoot a teammate too much by mistake, without dieing yourself. Or at least have a higher tolerance and deal a considerable amount of damage to teammates before being punished (allow you to shoot a teammate more before taking damage yourself). Or if there's a cvar for it maybe it should just be made non-default, that's the best idea so those who want it can still have it but not by default.
Just my ideas and view on this so if I'm wrong with anything do tell me. But yeah, I for one would play much more relieved with this gone from most servers and my defaults. So I thought to make a vote and see if others agree on changing this and want the same thing.