The CS Grenade was originally to be included in both Gearbox's version of Counter-Strike: Condition Zero and in the planned patch for Counter-Strike. As Gearbox Software failed to meet to deadline for their game, the project was scrapped along with the grenade. Only two HUD and a kill icon remain in the game files.
The idea was later reconsidered when Ritual Entertainment acquired Gearbox's assets for their version of the game but was ultimately cut. HUD icons remain in the game files along with a viewmodel and worldmodel and several mentions within the DLL files.
The CS Grenade would release a cloud of gas that would damage anyone that passes through it. The effects could also stay for a couple seconds out of the gas.
The only way a player would gain immunity to the gas produced by the CS Grenade was to buy the cut Gas mask.
Although both grenades have similar effects, the Molotov cocktail did not have a counter-equipment. The Gas Mask would negate the effects of CS Grenade permanently.
The CS Grenade producing a smoke would cause ill-equipped targets to cough, revealing their position.
It was most likely going to be Counter-Terrorist exclusive, as military forces commonly use them in real life.