The process is simple. Grab a weapon that can 'overheat' and shoot until it does so. Then when it is cooling down, throw a grenade. The grenade will seem to be coming out of you as you cannot see your hand throw it..
This happens because of a conflict between the animation of the weapon overheating and the animation of a grenade being thrown. Once the animation of the weapon overheating has been initiated, the game engine "wants" to complete it. Once the control to throw a grenade has been pressed, the game engine also "knows" that it must send the grenade out, and under normal circumstances, the animation would happen. But because the animation of the weapon overheating is in progress, there is a conflict between that and the grenade throwing animation. The game engine is scripted so that weapon overheat animation takes precedent, thus resulting in the invisible throw.