Does anybody know what this is all about?
It is a "Sturmpistole". The Sturmpistole is a modified flare pistol (Leuchtpistole) to fire explosive ammunition in combat. The soldier has loaded a "Panzerwurfkörper 42 LP" - an anti tank grenade. The Panzerwurfkörper 42 LP was a hollow charge round. The grenade had a range of 75m and could pierce 80mm of steel armour. Only small numbers were produced because Panzerfaust and Panzerschreck were available in greater numbers (and cheaper). There was a modified version of the Sturmpistole with shoulder stock to compensate the recoil of the combat ammunition.
By the way: The soldier is an officer of the german elite division "Panzergrenadier-Division Großdeutschland".