A temporary work around to this is to adjust the volume on your sound FX and music but they should look into this. I don't like sacrificing sound effects for game warnings.
I've tried them with great success when placed in buildings.
It doesn't always do engine damage but if I wanted engine damage, I'd rather throw an AT grenade or drop some TM 35's or Riegel mines as these give the best chance for an engine damage not to mention that they are cheaper.
I don't know how big an area radius of 8 is but I was pretty disappointed when I used a demo charge and it didn't wipe out a pioneer squad. One of their men was lagging behind.