Aren't most non MGs small arm fire only visuals?
No, they are not. At least maybe not all of them. But when they colide they actually do damage. The same way small fences on the maps sometimes are destoyed by small arms fire.
I myself also thought that they are only visuals (since weapons have a special string allowing them to colide with entities or fly thought them) but it seems like, game is still calculating what is being hit regardless. At least for cover it for sure does.
Thats why mortar pit (or any other emplacement which takes damage from small arms) will be taking damage from bullets hitting it, even if you order your squad to attack unit standing behind it. You can easily test it youself. I'm pretty sure I didnt use any MG weapons when I was testing it back in the day.
I would even say, that if all small arms actually had non-passable bullets, they might have become more effective against blobers, since even misses would have had a chance to hit different soldier enitity. But this need testing.