I believe the goal of gray-rocking here is to defend yourself against overly dramatic and abusive bullies which you are forced to have some minimal contact with (family member, co-worker on another team, friend-of-a-friend), not someone you have to deal and negotiate with daily. Those require different and situation-dependent strategies.

It's not making yourself lesser, it's basically "not taking the bait," which is very much a strength, not a weakness.

I think it depends on the power dynamic. It’s probably easier to implement with family members outside of your home than your manager.