I see you but I don't want to shoot

[Weasel]

Well is it possible that only one person in the spotting unit has a line of fire so is the only shooter?

I think they have a Maximum Range for shooting. So if you hold a SMG and the Enemy Unit is out of its effective Range it will safe Ammo and wont shoot.

That doesn't explain it, just played a turn and my AT support unit contained a KAR98 and MG34 and still didn't shoot at the enemy 134m away which they had LOS to and I was able to give a target command too. They were facing in the direction of the enemy also.