When I did my regular service in the 80s, the rifle grenades were frequently used, much more than M203s. Back then we were armed with Galils but each platoon had one or two guys with the M16A1/M203. I don't know if this was because the rifle grenades were considered better or for financial reasons as they were locally manufactured.
I've heard that it was not recommended to shoot rifle grenades from the M16 because it was less durable than the Galil and I never saw it done with a live grenade. I did once shoot the inert practice grenade from my friend's M16A1/M203 for fun. I remember the recoil was strong but not painful.
Today the IDF infantry only use M16s and I haven't seen rifle grenades in use for years. On the other hand, in riots, rubber bullet loads are shot using the rifle grenade cartridge with the M16A1 quite frequently. We are told that it isn't safe to shoot with the shorter 14.5 barrels but I've seen that done also. This has much less recoil than the grenades though.