I have grenade and cocktails on the same favorite tab. I open it up and select the one I want to use, It shows on the screen that I selected it, then I press R1 to throw it and I do the bash attack or nothing happens. What am I missing? is this a known bug?

You have to hold R1 and I'm pretty sure you'll hear a small sound. Then release it when you want to throw it.

Yeah, I have seen quite a few posts about this and people aren't realizing that the grenades/cocktails are equipped as a secondary thing now instead of replacing your current weapon. R1 does a bash with your current weapon and holding R1 until you hear a small click will activate your current selected grenade type and upon release of R1 will be thrown.