There was never any penalty involved, and it takes the same amount of xp to level from 40 to 44 with hell levels as it does without. The hell levels simply took more XP to progress through.
Arbitrary example to illustrate point.
With Hell levels
Level..............Xp to level
40.................10000
41.................5500
42.................6000
43.................6500
44.................7000
Sum=35000
Without hell levels
Level..............Xp to level
40.................6000
41.................6500
42.................7000
43.................7500
44.................8000
Sum=35000
Here are the actual XP charts for a wood elf druid from the time that hell levels were in game.
Level..............XP to Current Level.......XP to Next Level............Difference
28..................33,067,440..................36 ,879,360..................3,811,920
29..................36,879,360..................40 ,973,520..................4,094,160
30..................40,973,520..................49 ,896,000..................
8,922,480
31..................49,896,000..................55 ,053,768..................5,157,768
32..................55,053,768..................60 ,555,264..................5,501,496
33..................60,555,264..................66 ,411,576..................5,856,312
34..................66,411,576..................72 ,633,792..................6,222,216
35..................72,633,792..................86 ,436,000..................
13,802,208
36..................86,436,000..................94 ,058,496..................7,622,496
They were never bugs, and they were also not "fixed". They were redistributed in a fashion similar to my example above.
They also were acknowledged by the developers. Lots of silly theories get cooked up to explain bad research.
Here you have them explicitly referred to before the release of Kunark at a Dev Q&A at the second Fan Faire (Then called "Gatherings")in St Louis.
The hypothetical hell level penalty wasn't mentioned in the Producer's Letter because it didn't exist. Not because it was a conspiracy. Occham's Razor, folks.