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Assault infantry sections get their full durability at vet 2 which means they essentially reduce all incoming small arms damage output by 36% at this point(0.64 RA).
ON THE MOVE, Vet 2 FSJ FG42s will do 3 dps at max range, ~4dps at 20 meters and ~5 dps at 10 meters. This means that for the first portion of the engagement the IS are taking an average of 3.5 dps X 12(fsj models) X 0.64 recieved accuracy for the IS which comes out to only ~27dps. In other words it would take a full 3 seconds to kill a single model given this damage output and thats assuming every shot lands on one model.
If you look at the video though you'll note that by the time you order your FSJ to stop moving, they've already wasted a considerable amount of ammunition firing on the move and are forced to reload which delays the DPS boost you get from standing still. Once your FSJ do finally start firing again at the mid-close range they are now doing roughly 90 DPS against the section. Given roughly 2 seconds of on the move firing, an average of 2 seconds for each FSJ reload(actual reload is roughly 2.05 seconds) and another roughly 2 seconds of full mid-close range firing you should have done 250 damage give or take some based on range of individual squad members and me just ballparking the damage. Given that the assault section has 400 hp, it is perfectly reasonable you didn't wipe it.
Yes, the brit player got SLIGHTLY lucky in that your damage was spread out among the IS squad members instead of focusing on one or two models, but the numbers seem to add up.
As for IS being too strong too early- both sturmpios and assault grenadiers are superior initially to Assault sections. Assault grenadiers due to sprint, 5 models and having 0.95 RA while keeping roughly the same total dps. Sturmpioneers have superior dps at almost all ranges and a whopping 0.87 stock RA. Both Assault grenadiers and sturmpioneers are substantially more durable than stock 4man assault sections while having at least as much firepower.