Dodging shouldn't incur any penalties.
Dodging while in champ select isn't a big deal, whenever it happens to me, I just move on, wait another minute or two, and get into champ select again. It doesn't really hurt people at all. However, the reason why dodging often occurs is when someone is trolling or otherwise being a dick in champion select, which ends up being a lot more detrimental to the game and your team than a dodge does. So, I don't really see why dodging incurs a penalty, seeing as it's often used for a good outcome, and it doesn't even really hurt anyone much at all.
EDIT: I think the LP loss should be removed, but the timer should be lengthened or unchanged. I made this post in a bit of annoyance after I myself dodged a game and received the penalty, but I now see why it exists.