I never bothered, to test that one, as I pretty much always use the instant grenades (for me also one of the most interesting features, OXC added to X-COM), but the fact, that with timer 1, the grenade will go off at the end of the aliens next turn makes it in fact a little awkward. An extra option to let it go off at the end of the round would be nice, indeed. Or add a »-1« for instant grenades and let the rest be like in vanilla X-COM.