The devs made it quite clear why the change was made to Gnome-a-Palooza without bogging down the explanation with specifics.
Firstly I want to talk about the team(s) that were used during the first Gnome-a-Palooza and why they were different than any other farming teams used to date. This first team is the most efficient, especially in the time department.
Sister Superior (SS)
Dust Devil (DD)
The first thing to note about this team is that if it fights a group of enemies that don’t have 25 or more combined armor and health, it will kill them with 2 spell casts 100% of the time without touching the board or giving the enemy a turn to act. Those 2 spells of course being SS, which does 10 to all enemies via the 2 IH’s, and then DD, which does 5 to all, and then another 10 from the IH’s.
Dust Devil (DD)
This team is similar to the first, but slower because of Greed’s trait to explode a gem before you make a move, and a longer cast animation on Greed than SS. This team was also popular, because it also killed groups of enemies that don’t have 25 or more combined armor and health, it will kill them with 2 spell casts 100% of the time without touching the board or giving the enemy a turn to act.
One thing that sets these teams apart from previous farming teams, is that people are willing to forego the use of the hero, and any hero talent exp, which is fairly rare for farming teams. Normally people try to maximize everything they can, but these 2 teams are so brutally efficient that
Now there are 2 additional reasons that these teams are different from all farming teams that came before them. First and foremost, you don’t have to interact with the board, including 4 matches. Secondly, it doesn’t give the enemy a turn to act if they don’t have a combined 25 armor and health. Now while this seems intuitive for the sake of speed, I think it goes against the spirit of the game in a negative way. All previous versions of fast farming teams, Elspeth+Bombot, Birdbomb, and Rowanne teams, rely on one or more empowered troops to interact with the board, hopefully cascade, leading to using the primary damage dealer to 1-shot the entire enemy team, and doing so in the same 2 actions that the above 2 teams could do. Now while these teams could all potentially 1-shot enemy teams with substantially more armor and health than the 2 teams listed above, they had to interact with the board, and had a chance to not fill up their respective damage dealers, and not cascade, giving the enemy a turn to act.
Now, while the above 3 teams were fast farming teams, they again had to interact with the board, have a chance to not fill their damage dealer, and not cascade and get an extra turn, thus giving the enemy a turn to act. So the old and new teams are very similar, but also very different on a fundamental level, aka interacting with the board and/or giving your enemy a turn to act.
The solution the devs came up with of course helps deal with the problem that first 2 teams that I listed caused, aka a massive influx of a variety of resources via a team that could consistently win fights in 10 seconds or less, not even counting what the use of the eventual vault keys would give.
I do however want to propose some simpler solution to maybe try out for the 3rd Gnome-a-Palooza event. The first solution, which I’m kind of surprised wasn’t done first, is to nerf both IH’s 3rd trait and DD’s spell from 5 damage to 3. This drops their damage potential from 25 to 15. This combined with maybe a level increase on level 1 explore to maybe 12 or 13, if needed, should put troops out of range for such a strategy.
Now there is another team idea with slightly higher damage than the first 2 teams, with 2 DD’s and 2 IH’s. In their current form it would do 30 damage to all enemies, and 18 damage to all enemies if the numbers as nerfed to what I just listed. Now while this may seem like enough to overcome the problem, it opens up another problem for the farmer. That problem is that DD doesn’t give you an extra turn like SS and Greed do. So the opponent gets a turn to act no matter what, and you have to deal with any 4/5 matches on the board or leave them for the enemy. So while it seems like a simple addition to get around the nerfs and level increases, it makes the team like any other farm team, minus a hero.
Another potential solution, though potentially more involved, is to change the ratio of the level up stats of all the non-Cedric gnomes to frontload their armor and health, thus putting them above the 25 damage threshold that the top 2 teams can do. This won’t change their health and armor values past a certain point, level 11 i the case of the current lowest level of explore, since you are just changing the locations of some 1’s and 0’s, not replacing 0’s with 1’s.
Making the above changes could allow you to increase the loot drop rates back to their original point, or potentially do a hard but small nerf, instead of the scaling nerf for quick fights and lower levels.