Thank you so much for your reply, I changed the Ray Epsilon like you said and it fixed it so now the dust looks great!
Thanks again for your help, and I'll make sure to attach scene files when I have any other problems .

That's the weird thing about this problem, I can't recreate it on a basic plane, the weird black shading only occurs on the grenade.

I followed Cornelius Dammrich's explanation and SilverWings Youtube video (https://www.youtube.com/watch?v=zMygCctQIFc) on scattering dust but modified it for Blender Octane. Basically, I just created a low poly icosphere and applied the material below to it.

However, there's a problem I came ...