Page 20 of the rulebook would be helpful here.
There is a difference between splitting shots by type and by target. They were doing the latter.
Also, keep in mind that weapons are fired by the formation, all at once, and at another formation, not at individual units.
Hits are allocated, not shots.
Anyway, as I understand it, you have two choices - take the cover modifier and be able to apply hits to every unit or do not take it and only be able to apply hits to those units that are out of cover.
A bit weird, but there you have it.