You may choose to return 0, 1, or 2 monsters to their owners’ hands.
You may target Monster Tokens, and they will be taken off the field, instead of returning to the hand.
Spirit Monsters can still be returned to their owners’ hands by the effect of “Penguin Soldier” even if “Spiritual Energy Settle Machine” is in play.
Netrep Rulings:
“Penguin Soldier’s” effect DOES “specifically designate a target” for purposes of “Lord of D.,” etc.
“Penguin Soldier” SOMETIMES “specifically designates 1 monster as a target” so for “Chaos Command Magician” or “Metalsilver Armor”, if “Penguin Soldier” is targeting ONE monster then it’s “specifically designating 1 monster as a target”. If Penguin Soldier targets TWO monsters then it does “specifically designate a target” but it does NOT “specifically designate 1 target”.