First, here is the set-up for this hypothetical strategy game:
* The game is turn-based strategy.
* There are vehicles. A unit can enter a vehicle, drive around, and use any weapons attached to the vehicle. When driving around both the vehicle and the unit inside it move. It's also possible to leave the vehicle.
* Not every unit will necessarily be in a vehicle; in fact, there are reasons one might not want to be in a vehicle (and perhaps there may not be enough vehicles on some maps).
* If a vehicle is driven over an enemy unit not in the vehicle, said enemy unit will take damage due to being run over.
* There is a friendly fire setting; when it's on, attacks can hit allies, and when it's off, they can't.

So, here's the question: If friendly fire is OFF, and a player controlled unit were to drive a vehicle over another player controlled unit (not in a vehicle), would it strike you as odd if the unit on foot did not get run over (despite being in the path of the vehicle), or is that the behavior you would expect?

Turning Friendly-Fire off means there should be NO way for allies to injure each other; any exception would be pointless.

Ditto. If friendly units would get harmed when run over by allies with friendly fire off, it'd mean it's not really fully off...

You'd have to be pretty specific and have the options marked as "Friendly gunfire on/off" "Friendly vehicle damage on/off". "Friendly fire" is normally used as a general term for all friendly damage.

As the previous two posts say, you'd have to be a real dick of a dev to not do universal toggles.

The question is, would you prefer it to work the way I describe, or should the game behave differently? Here are a couple other ways it could work without actually allowing you to run over allied units and damage them:
* The allied units move out of the way automatically when the vehicle moves over their square.
* Any squares containing allied ground units are treated as impassible. In other words, you can't move units to such squares, and in games where you simply choose the destination square instead of controlling all movement, the vehicle will go around that square as though it were impassible. (This means that friendly units could block vehicles from passing through a choke point, for example.)

You shouldn't alter the way the game flows by changing a friendly fire option - it shouldn't behave differently. Have the vehicles still accidentally "run over" your allied units, but don't give them a damage penalty - realism may suffer slightly, but the gameplay and tactics should always remain the same in my opinion.

Or, alternatively, animate the allied units going out of the way, but have them go back to their initial positions once the vehicle has passed.

I have seen this done in some SRPGs when allied units move past each other.

I think it should be pretty obvious that the distances you see in-game are not to scale.

True enough, but this animation should occur across the board regardless of whether friendly fire is on or not. I don't think game options should alter the behaviour (even animation) of units, just the penalty.