Dixon Jones from Majestic SEO, a person I respect, trust and know is incredibly honest, posted in a Google+ thread that he used it for a site and it helped it get out of a manual link penalty. Dixon wrote:
I have got a manual penalty lifted... which had a positive impact from a really bad place. There is no doubt that the site in question has not returned to previous levels from before the penalty... but then again it had a manual penalty for a reason!
When asked for more details, Dixon explained:
I worked hard to remove the bad links - but was unable to move them all. So I documented the efforts in the disavow file and then gave time for the disavow file to take effect in the index. +Uri Lederman I was directly told in the re-inclusion email that I had a manual penalty which was now lifted. +Cody Cahill Now - many of the bad links still exist - but are now presumably disavowed - so causation v correlation seems strong. Plus - still nothing concrete - but look at who did a +1 on my initial comment ;)
Now, this should work for a manual penalty fairly quickly. Those who want it to work for a Penguin link penalty need to wait for a new Penguin refresh. There is a WebmasterWorld thread just on the Penguin/Disavow topic itself.
But from this we can have a pretty good and honest opinion that the tool does indeed work and should work with Penguin if used correctly and when there is a data refresh or update.
Forum discussion at Google+.