I think it is a little silly and not sure if this is how it is intended to be used. In CoH1 you used to kill your own grens and feed medic bunkers, but that was patched out and would only let medics pick up dying grens if your opponent killed them.
It is funny to do though and can actually pay off really well, especially with mass conscript and demo to get a lot of penals. If you control the fuel, it can be pretty solid!
Not really, I used Tommies Riflenade to kill Recon Tommies, they multiply like cancer
I tried it so many times in 2.602 and 2.700
You can use Gren nade to Volks too, but expensive