The fuze is a lot better than you think.
If you pull out the pin and fire the gren from the rifle the set back forces the mushroom head down onto a brass collar. if you look carefully the mushroom head has a cutting blade on the bottom. This will cut the collar at the weakened points but the mushroom head will shroud the brass collar and stop the two halfs falling off. as the grenade starts to slow during flight the spring under the mushroom head will re-assert itself and push the head back up allowing the two halfs of the collar to fall away. The grenade is now armed and upon impact the mushroom head will compress the spring and strike the detonator ( a modified 303 cartridge case) and explode the grenade. The idea of this fuze was to hopfully detonate the grenade before it had time to bury itself in the mud. most previous british rifle grenades were graze fuzes which had a slight delay before detonation allowing them to go into the ground a bit.
hope this has enlightened you.