I've actually found places to use HDC to its full extent. What you are describing is normal. The grinding noise is also normal.

When you first press HDC, nothing happens for 3-4 secs and then the car applies the brakes and slows the car down to walking speed, about 3 or 4mph. You do NOT need to touch the pedals. However if you choose to accelerate or brake temporarily, you may do so with the gas or brake pedal. Once you lift off the pedals, HDC will regain control of the vehicle and get you back to that walking speed.

What many people dont know, you can control the speed at which HDC operates/walks you downhill. If you feel like you wanna "set" it to go downhill faster, use the cruise control buttons the same way you would accel/decel while using cruise control. For this, you do not need to use the gas/brake pedals, just the cruise +/- buttons.

HDC also works when the vehicle is in reverse. If for some reason, you need to back down a steep snowy hill or driveway, put the vehicle in R and push HDC.......it WILL work. (I don't know but it should be the same for manual transmission.......I have an automatic).