Yes, stab vests.
There's every reason to think it was a 'real' grenade, as Cregan (allegedly) had already committed one murder using such a thing.
Why would they have done so here (leaving aside the fact that the two officers here never got to the house, the car's engine was still running)? As far as they knew, this was a routine call to the aftermath of a burglary where the householder was there (so the burglar was long gone).
Their expectations would be to have a cup of tea with the householder and advise them about security, check to see if there was likely to be any forensic evidence (and arrange for scenes of crime officers to attend if there was), take a report of what had been stolen and a witness statement from the householder, and put them in touch with Victim Support if they were distressed by the burglary.
If there had been a suggestion of a suspect being on the premises, they would have approached the job differently, but that is not what the call was about.