Hi Jane,
I don't know a great deal about your great uncle - except for his age, and that he was listed as the chief saloon steward on the Falaba. I am afraid my research up to date has been mostly about the passengers on the Falaba.
However, I have read quite a number of accounts by survivors, and none of them mention the crew of the submarine shooting passengers. The crew did surface and were accused by survivors of jeering and shouting taunts at those struggling in the sea.
I can also tell you that a second torpedo was fired at the Falaba. This happened as the ship was being evacuated, and while the ship was sinking from the first impact. Most passengers and crew had been evacuated, and a boat was being lowered when the second torpedo hit. This boat was destroyed. According to Hubert Blair, the boat simply disintegrated, and the force of the explosion threw him into the sea. The force of the blast was enough to break the ribs of another passenger, Lieutenant Toller. Perhaps your great uncle was in the lifeboat, and was killed in the explosion. That may explain the story of how his cufflink was shot 'into his body'. I must add that I have no proof of this, it is just a thought that occurred to me.
I hope this helps
Craig