It's been lurking in my mind for years. What I've heard years ago was that a Jewish person/group (or someone against their will) who was working on a part would slightly tamper a piece of a gun, bullets, or equipment to have a malfunction later on.
It sounds like a possibility, but questions pop up like;
Bit of small thing but It got me thinking. Can anybody confirm this?
To answer your main question (were German war materials sabotaged by conscripted labourers or prisoners), the answer is yes. I provided two examples in a previous answer to similar question:
The first comes from Chapter 20 of "The Guns of Normandy" by George Blackburn (Blackburn was a Junior Officer serving in a Canadian Field Artillery Regiment). On a gun position north of Caen in 1944, it was observed that many of the artillery shells fired by German guns were not detonating. Several of these shells were dug out of the deep (over 9' in one case) holes they drilled into the earth. Upon examination, it was discovered that the impact fuses had been deliberately tampered with at the factory so that the shells wouldn't detonate. As Mr.Blackburn notes, this courageous act of resistance by workers at a Czech munitions factory likely saved the lives of hundreds (if not thousands) of allied troop's lives, and had a serious negative impact on the effectiveness of German artillery fire during the fighting in Normandy.
The second case involves a rocket-propelled Me-163 Interceptor. In the mid 1970s, the Canadian Aviation and Space Museum restored one of the two Me-163s in their collection. During the extensive restoration process, restorers discovered that two critical systems had been sabotaged, either of which could have resulted in the destruction of the aircraft had it been flown:
The glue used to bind the skin to the frame on the wings had been tampered with so that it didn't adhere properly. Museum staff theorized that soap had been mixed into the glue to stop it from curing correctly.
A small rock was found wedged between the fuel tank and its support frame. Had the tank been filled and pressurized, the rock would puncture the tank. Due to the highly volatile fuel/oxidizer mix used to power the rocket motor, this would've resulted in some impressive (and highly destructive) fireworks. The museum's website has some more details and photos: https://ingeniumcanada.org/aviation/collection-research/research-messerschmitt-me-163.php
Slave labour (mostly military/civilian prisoners, but also some Jews) was also used in the V2 Rocket program. In fact, more prisoners died working on the rockets than Allied personnel and civilians were killed by them. Source: https://www.airspacemag.com/space/a-amp-s-interview-michael-j-neufeld-23236520/
As for your second question (Wouldn't it be safer to just kill them?), the answer has to do with the pool of workers available to the Germans. As the war went on and more and more men were conscripted into the armed forces, the available pool of labour shrank considerably. Use of prisoner labour was one way to make up the deficit, though it was not without risk.
I'm not familiar with the specifics of testing or quality control procedures in German industry during the war, so I can't comment on that. However, sabotage was not always detected, as the two examples above illustrate.
The infantry weapons available to a given army were not necessarily the result of production capacity, and were more often related to the tactical doctrines of the army. It's important to note that the Germans were not the only army using bolt-action weapons as their main infantry rifle even in the last days of the war. The British and Commonwealth armies used the bolt-action Lee-Enfield No.4 Rifle right until the end of the war, and well into the 1950s.