Considering the historical argument you suggest, he could have a build where he behaves like a standard musketeer, and has melee armor against cavalry and ‘shock infantry’.
In case of toggling to ‘grenadier mode’ he again acquires ranged defense and loses the bonus against cavalry. The transition from one mode to another (Grenadier-Musketeer) should take a while to enable so that it does not toggle instantly. In other words, when you return to musketeer mode, it takes some time for the grenadier mode to become available.
Maybe they could reduce their cadence, but increase their damage. Make each impact a little more intimidating. The grenade launcher card must be absorbed by the ‘advanced arsenal’ and the upgrade ‘Insendiary Grenades’ give it a bonus against general infantry, but against cavalry and ‘shock infantry’ a negative multiplier when in grenade launcher mode.