Really good question. The way I play it is I allocate the dice normally but the machinegun dice, only, can allocate to the 6" firezone.
For example, in a full-strength Desant Squad, Trooper 1 is the center of the firezone, and is the closest figure. Troopers 2 and 3 are within 3" of 1. Troopers 4, 5 and 6 are within 6" of one.
A prone MG-42 and his half-squad fire: that's 4d6+1 dice with the auto trait, and 3d6 of rifle fire.
The rifles roll: 1, 5, 2.
The MG-42 rolls: 7, 2, 5, 4.
The MG-42's "7" is allocated to Trooper 1. The MG-42's "5" is allocated to Trooper 2, and the Rifle's "5" is allocated to Trooper 3. The MG-42's "4" is allocated next, to Trooper 4, since it's from the MG-42 and has the Auto trait. The MG-42's "2" is allocated to Trooper 5. The Rifle's "2" can't be allocated to Trooper 6, since it doesn't have the Auto trait, so it's allocated back to the dead Trooper 1. The Rifle's "1" is discarded.
Trooper 1 is killed by the 7. Troopers 2, 3 and 4 get armor saves. Trooper 5 isn't hit. And since Trooper 6 is never allocated a die, the Germans fail to suppress the Desant Squad. If the Germans had been firing M1 Rifles with the "auto" trait, the last "2" would have been allocated to Trooper 6, and the Desant Squad would have been suppressed.
I don't know whether or not that's the correct way to play it. But in the absence of further clarification it's how I've interpreted it.