I also think it should simply unlock the upgrade for each squad and cost 0 muni per unit like normal so you aren't forced into having an only close range army.
These PPSh's will be unique among SMG's in that they will not reduce DPS at any range, only increase it at closer ranges.
Hate it when people don't read.
If I had to add an upgrade, it would possibly be adding two additional conscript squad members for no additional population or it conscripts reinforce is 2 for every 1 reinforce like IG in DoW II when they had their squad leader upgrades.
Eight man squads sounds extremely broken though. CoH has never gone over 6, and there's a good reason for that. Nothing in the game is balanced to combat or suppliment an eight man squad. Actually getting a squad wipe on an eight man squad would also be stupidly hard to do.