I think it's more of a Roleplaying options than it is a mechanic.
There are people who complains that their oath broke easily, meaning that some/many people think it is not a reward becoming an Oath Breaker.
I personally think the fix is simple: once you broke your oath you are barred from picking "good dialogue options". You're forced to be evil. That's your "penalty". And you'll given hard, potion consuming, item breaking quest to get back to proper Paladin Path.
