foreign citizen leaves Poland once every 90 days for 1 day
Where did you read that policy/rule/law? I believe that citizens of USA, Canada, Australia, and selected non-EU countries have 90 days out of 180 days rule. In other words, you can only stay in the Schengen Area upto 90 days (cumulatively) and you must leave the Schengen Area area for 90 days.
Related: 90 day stay in Poland without a penalty? 30 days in Croatia
will be in Europe for 120 days. could i spend 90 days in Poland and 30 days in Croatia without a penalty? will there be a penalty of any sort if i stay 120 days in poland?
Yup, 90 out of 180 more or less. You could also go to the UK, Ukraine, Romania, Moldova, Bulgaria...
If you stay more than 90 days out of 180 in Schengen, if caught, it's an instant 1 year ban from the Schengen Zone.
90 days in Poland and 30 in Croatia would be fine, though.