If you draw a small dot with pencil tool it will not close the path. That little circle under the cursor indicating that it will close the path never pops up. So now you have to zoom in if you want to draw small shapes and get a closed path.

Changing the number in the "Close paths when ends are within:" doesn't do anything so that's not the problem. It's a new bug.

This was no issue in CS6. You could hold "Alt" to close the path no matter how tiny shapes you were drawing.