>Why is burst/automatic fire bad for suppression when the weapon designed primarily for suppression(i.e. MG) is used almost entirely in full auto?
Because machine guns are usually belt-fed and have a whole team of people to bring belts to the battle. E.g. the official TOE says that in a team there are 4 members, 3 of them has 7 magazines for 210 cartridges, and a belt with 200 more cartridges. Then there is the M249 gunner with 4 belts for 800 cartridges. Obviosuly all the belts are for him. So out of the 2030 cartridges 1600 are for the light machine gun. And the M249 can take the magazines too (in theory, in practice it's far from reliable). In other words, according to official doctrine ~80% of the ammunition is for the M249, and the gunner needs 8x more ammunition than a rifleman.
>burst fire
There are usually three reasonings behind its existence, and I disagree with all three of them.
<to limit ammunition wastage by limiting automatic fire
If someone can't use automatic fire efficiently (either due to his lack of skills or because the weapon is not suited for automatic fire) then he will still waste ammunition in burst mode and he'd be better off with semi-automatic fire.
<to increase hit probability
The theory is that a bunch of projectiles hitting in a controlled pattern are more likely to hit the target. Project SALVO and all of its predecessors and sucessors tried it, and they never managed to make it work. And they started in the 1950s and the programs were running even in the 1990s. Decades of research, more arcane ideas than what we could come up with, and it was all for nothing.
>to penetrate armour
The AN-94 is the best example: it's overcomplicated for what it is, and yet you'd be better off with a self-loading rifle designed for a bigger cartridge (e.g. .338 Lapua Magnum).