I just don't see why it should do damage.
It is a weapon, it should do damage. It is also a support weapon, it should supply support. Now it only makes noise, has almost no suppression and does no damage. So when squads are (by some miracle) actually suppressed, they can easily kill the mg34, like the USF blobs of doom do.
OKW is meant to be a hard hitting specialized infantry army backed by specialist supervehicles.
Yet they face Soviet and Riflemen hordes, they should have an mg that can actually keep huge blobs at bay and damage them if blobs are used. It pretty much fails at both.