Thats why they should introduce a damage cap on aoe damage profiles like they did in Warcraft 3.
In Warcraft 3, the total AOE damage possible by a single source is capped at a certain number.
What I'm suggesting is that AOE damage should be capped per SQUAD.
Example : A Conscript has 6 models of 80 hp each, making it 480 hp. But if the models are clumped, a single 80 damage grenade will wipe it. Lets say we cap the grenade damage to 300. Even if the models are very close, at least 2 would survive. Or maybe 3 would survive with less hp on each model. Calculation can vary, but you get the idea.
If it was a grenadier squad, with effective health of 320, would probably leave a single model with 20 hp by the 80 damage grenade.
Of course this is capped by squad, so if a single shell/grenade hits multiple squads it should deal damage to both squads without being capped.
It might take a step back from realism but with appropriate numbers it shouldn't be that bad, and make the game less prone to RNG-induced stress without touching the anti-blobbing power of AOE weaponry.
And this would fix the basic problem of Axis snowballing infantry, how exactly?
That was my basic theory. The squadwipes from lategame arty (of which allies have plenty) is Relics attempt to minimize the effect of allied (in particular soviet) general purpose infantry falling behind their german counterparts in the lategame and the axis infantry snowballing.
And whilst your suggestion would fix one problem it would cause an even greater, and that in reality we must fix both the issue of snowballing infantry with Vet and Schrecks at the same time as we fix the squadwipes from arty.