Strengthen regularization, which penalizes model complexity.
Correct. Regularization is a technique that penalizes model complexity (the magnitude of the weights). The larger the weights, the more the model forcibly fits the fine differences in the training data, causing overfitting. Adding a penalty makes training keep the weights as small as possible to reduce that penalty, so the model is less swayed by the details of the training data. As a result, generalization performance on unseen data improves.