You're better informed on Chinese culture than I am, Xue, but friends who travel more than I tell me that in Hong Kong they do use that title to attract students. I know of several prominent Hong Kong based sifus who have "accepted" the label of "grandmaster" or "Dai-Sifu" (of course, these guys spend a lot of there time making money in Western nations too). I'm glad to hear that the practice is still avoided on the mainland.
Chinese or Western Students?
And you will find A LOT of Chinese martial arts teachers coming to the west using the term Grandmaster but back at home, in China, they are not a Grandmaster (Dai Shifu, Da Shifu) they are a shifu. Chen Zhenglei calls Di Guoyong Da Shifu they better be close friends and joking or a major insult was just thrown and a fight is likely to occur
You will find the term in Beijing too, but never for Chinese, only for westerners. Now I am guessing, I've never been to Hong Kong, but my shifu grew up and trained there, but I would be surprised if in Hong Kong the Students that were Chinese living in Hong Kong, where calling their Shifu “Dai Shifu”. However I would not be surprised if you or I showed up to train there that we were not told to because they know that westerners are hung up on titles and titles translate to $$$.
There is a guy in Beijing that has 2 websites, one in English and one in Chinese. On the English page he is a Grandmaster. On the Chinese page he is simply a shifu.
Some people in my taiji class tried to call my shifu "Grandmaster" he told them to stop. When they pushed it he said there are no Grandmasters in China and said they have to stop calling him Grandmaster.
I once called my Sanda sifu (a personal friend) a Grandmaster...he hit me. I guess because I know the etiquette and my wife is Chinese and tells everyone I am more Chinese that she is when it comes to CMA, I don't get the pass most westerners do