direct fire vs area fire

[Narwan]

Ok, the splash damage for mgs explains a lot. I've noticed that if there's an AFV and infantry in the same hex it's easier to pin the infantry by firing at the AFV.

Same quirk indeed. The target unit has supression determined from the direct fire routine and the other unit in the hex from the splash routine.
The downside from firing at the AFV is that you're not going to hit and damage the infantry as often you would with direct fire. Those hits and damage cause far more suppression than splash fire does, but that's if you hit.
I often do it the other way around, use mg's to fire at leg units to button AFV's with them. That way you might still score damage on the infantry while quickly buttoning the AFV.

But it all depends on the situation. No one way is better and in the long run it all averages out more or less.

Narwan