Use/Nonuse of Grade 1 Indicators in Category 2 Transcriptions

Yes to both of those questions.  It may be helpful to think of your Category 2 transcription as simply "uncontracted braille" and remove "grade 1" from that label.  "Uncontracted braille in a UEB context" may be an even better framing.  UEB is still our framework in Category 2 for formatting, punctuation, and, in general, indicators.  The grade 1 indicator is not needed for single letters standing alone or words that in UEB would be shortforms, but it does still have uses in these transcriptions.

The first is to end numeric mode in a sequence of numerals and letters, just as in UEB.  For "5a a 5b" a grade 1 symbol indicator is necessary before the "a" and "b" to differentiate the phrase from "51 a 52." The rules regarding numeric mode all apply, so if your example were "5A a 5B" the capital letter indicator would end numeric mode (and a grade 1 symbol indicator would not need to be added).

Another place grade 1 symbol indicators can be useful in foreign language texts is with symbols and shapes.  Where a UEB symbol could be confused with an alphabetic symbol of the non-English language, a grade 1 indicator can help the reader interpret the symbol.  For example, the UEB shape indicator (dots 1246) is the same in French as e-diaeresis.  A grade 1 indicator before the shape indicator distinguishes it from the French alphabetic symbol.  In this case, the grade 1 indicator isn't doing exactly the same thing as in UEB, but its use is clear and helpful.

I have had some discussions before about other uses of the grade 1 indicator. There aren't set guidelines, but you may decide that it is useful elsewhere, although not strictly necessary.  In a dual-language text, there is an argument to be made for the consistency of how symbols and indicators are used - personally, I am in favor of using a grade 1 indicator in front of a symbol like a superscript indicator whether it is in an English passage or a non-English passage of the text.  The shape indicator doesn't overlap with any Spanish alphabetic symbols, but it may still be confusing to run across it within Spanish braille - a grade 1 indicator is not strictly necessary here but it may be helpful.  These kinds of decisions are, at this point, at the discretion of the transcriber; the main thing is to be consistent throughout the transcription.

(Note: use of the grade 1 indicator will not be the same in a language with a different writing system, like Arabic or Japanese)