The AoE range being reduced 17% is the damage reduction. The lethal explosion radius has been reduced.
The m2 60mm mortar already exists in the game assets. It was decided that cloning the Ostheer 81mm mortar was the way to go instead.
This might be so. But as we see the cloning was a bad decision. It just didnt work. And we now constantly (and rightly) move the stats away from the 80mm version toward the 60mm mortar version. So I think it is not at all unreasonable to revive the idea of using the already existing M2 60mm - or, if it turns out being too weak (which I highly doubt) a buffed version of the M2 instead of using a nerfed 80mm version.