Nope! I've been quite happily using a combination of chainshot and grape to disable and capture the small Maratha Confederacy fleet. In fact, its almost essential when dealing with Dhows otherwise they charge at you like suicide bombers and try to blow up under your flagship. But I was actually being cautious in this battle precisely because I wasn't sure what to expect.
Also when they did fire they seemed to be fiting shot at the hulls, there was no spattering of grape or high flying hits to the masts that I noticed. So, I don't think the fire selection type was bugged. They just seem to have a really low range probably the same as carronade frigates, which was another ship type I tried and abandoned for the same reason.
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