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I've noticed this on multiple AK variants, only one that's still fine is the Russian AK-74M.

The recoil is just too high, you used to have a good chance to win a firefight at 20-50m but now the odds are low. I could maybe excuse it on full-auto but even semi-auto mode has way too much recoil, you have to completely readjust after every shot.

Other guns didn't see such a dramatic increase in recoil after the update, wasn't the purpose of this new mechanic to make high-RPM guns like MP5 less OP? Those stayed basically unchanged but AK gets punished like this, why?

You only need 2 bullets to kill with a 7.62. The Ak74 needs 3 when hitting the vest.
Recoil is very predictable and easy to control now that it doesn't desync every 4th bullet. This is perfectly balanced.