We might be wrong, but the way we interpreted the rules is; instead of 'shooting' a unit throws grenades. The damage comes from the grenades not the unit. The grenades are not suppressed so no suppression modifiers.
Isn't the whole point of suppression to force units to kep their heads down button up. So when suppressive fire is incoming (succesful suppress marker) exposing a unit to toss grenades seems wrong.
1. firing when suppressed is reduced as the units are not exposng themselves to improve quality of fire. They are in ffect trying to suppress then enemy.
2. Throwing a grenade would be risky and less accurate.
3. There is a case to say suppressed units cannot do certain actions.
The rules state "Each marker imposes a −2 penalty ANY TIME the unit rolls a dice."
And "Dispersal rolls are not affected by Suppressed markers" but in this case you are generally firing out of LOS. So suppression is not as big a factor.
Suggested house rule :-
You cannot indirect fire or throw grenades when in LOS and range of an enemy that suppressed you this turn.
As above but roll a die - subtract suppressed and if negative cannot carry out action.
This will enforce good tactics e.g. suppress the enemy and then assault etc. having a fire team/MG piling on the fire