A discount without a cap is certainly better than a discount with a cap from the founder's perspective, but the investors and founders are still at odds because a founder would want the valuation at conversion to be as high as possible so that the new investor's dollars are converted at the lowest equity stake possible. But when that happens, the early investors dollars are worth a lot less in terms of equity in the company. The early investors would still want the valuation of the company to be as low as possible during the conversion event so that they get more equity for their early dollars... even with the discount.

The only real way to keep the early investors and founders exactly on the same page with regards to increases in valuation is to have the early investors convert as early as possible, or in other words, an ordinary equity / Series A style round. But this is something early founders are trying to avoid because of the uncertainty of the company value, the cost of the legal work, and requirements involved once you have third party investors.