I'm pretty sure captured Axis 37mm AT guns always shoot HE shells (without activation) at full range.
Pretty op
This was with US vs. WH
[5.7.2] captured WH 37mm free HE
Re: [5.7.2] captured WH 37mm free HE
I have seen this bug happen as well, in the same case when an American squad captures a PaK 36.