It's a blatant penalty. Yes, the distance is short, but that is only because the defender sprinted into the challenge and made himself as big as he possibly could. If he stood still trying to block with his body, it's a completely different situation. It's similar to a kick in the face. If the kick is at face height, we're talking a possible red card. If the player who gets the kick in the face ducks down to having his face 50 cms off the ground, then he's putting himself at risk and no free kick.
In my opinion, it's not only a penalty, but VAR should also be checking it for which colour the card should be. As I said, not only does he clearly block it with his hands, but he puts himself in that position and by all accounts looks to be stopping a goal because of it.