Wait, this is not a “bug in Bitcoin Core” this is a fix to the PR which changed block validation rules without adapting the block creation logic…
I’m not sure what exponential growth you are referring to. Are you asking if in theory it’s possible to extremely increase the block rate with any grace period value if the attack persists long enough? If so then yes.
In theory the difficulty can always be brought down to 1 if you can constantly claim what took you 2 weeks took you 2 weeks + x seconds. See the numbers i shared above. But i’m not sure how relevant it is: for instance with a 600 seconds grace period it would take hundreds of years to bring the difficulty down to 1.