I'm all for a bit of history, but this just seems insane?

It actually could have happened that way
Which self respecting German soldier would admit he had held the enemy at gun point, bottled it, shared a ciggy, which in turn cost him his gun to that enemy and was then humiliated further kicked up the butt and sent on his merry way as an inconsequential coward numpty turnip!

It's all about perspective

 

Possible I guess, but it would be a monumental gamble to let him go though wouldn't it?

 

How?
The German had already proven himself not up to shooting someone at close range - he had compromised his loyalty by letting someone from the enemy live during war conditions.
Yes, he could have returned to his troop, told them where your Grandfather was ... but, by doing so, he would also have risked them being caught ... that could have (potentially) exposed him to being proven a "coward" by your Grandfather.
Shame, and the sense of shame, can put an enormous amount of pressure upon a person to behave one way or another.
Consider the alternative: your Grandfather disabled the German, shared a cigarette and then, shot the poor blighter in cold blood thus defying the Geneva convention.
Choose the ending you prefer and which sits most comfortably with your conscience

 

The Geneva Convention came into being after the war. In 1949 in fact. Its my (possibly incorrect) understanding that it came into being in an attempt to prevent some some of the horrors of WW2 from being repeated. I think it was more to do with preventing torture except where there was an immediate tactical need, and not to shoot someone that was actually surrendering and posed no threat etc. Even if it had been out during WW2, I don't think it would have prevented a soldier from killing another uniformed soldier on the battlefield.

I'm tempted to say that had I been in my grandad's boots, I'd have hit the German over the head with the butt of the rifle, thus, erm, ensuring his silence, but the truth is, having never been to war, I can't honestly say what I'd do, but I whatever, I don't think I'd let him blab, because think of what is at stake. Not just your own life, possibly not even just your squad. Battles in Europe were fought fiercely for the control of bridges that opened up major routes. One squad could make all the difference between one entire army advancing one way, or another one advancing the other way. I.e. potentially, one person being allowed to report where he'd spotted the enemy could potentially change the entire outcome. Too risky. But anyway, we can speculate all night, but we'll never know.

 

Never knew my grandad he died from his ww1 injuries in 1947 before I was born. I am lucky enough to still have my dad who tells us of his dad's wartime experiences. Even second hand my dad telling us of my grandad observation of the young lads joining him in the trenches
" The young lads that had joined up, were so physically immature that their necks hadn't developed enough to fill the smallest army collar, they was just little lads" never failed to move us as children or my children when they were told. As a family we are all still deeply aware and respectful of the sacrifice that was made.
We cannot stop the passage of time but I am hopeful that relating family oral history to our youngsters, having the advantage of technology and accessible archives probably gives us the best chance of maintaining our links to recent history that we have ever had.