The US does this all the time. If there is a group of freedom fighters that needs weapons to fight a geopolitical foe but lacks the funds to buy arms, the US will supply them if it feels it is in the national best interest. The Mujahedeen in Afghanistan were a good example of this: fighting the soviets in the mountains, their old weapons meant little against heavily armored attack helicopters that obliterated the ranks of our desert allies. It didn't matter how much we trained, or what small arms we supplied, the soviet helicopters would fly strafing runs that slaughtered scores of the resistance, forcing them to hide in caves. Fed up with this, the CIA supplied Stinger missiles to the Mujahedeen. Easy to use, these shoulder-mounted missiles changed the face of the war, directly leading to the abandonment of Afghanistan by the soviets. The soviets defeated, the US turned its blindest eye to Afghanistan. And lost all of its unused missiles.
The grey trade of arms occurs when a state circumvents international safeguards to pursue a political agenda with untraceable weapons that are handed over to governments and individuals without a strict End User Certificate detailing who and what the weapon is intended for. These weapons, already unregulated, end up on the black market, being sold dozens of times and changing hands from fighter to fighter as conflicts change.
There is no easy answer to whether or not grey arms are a good or a bad thing. On the one hand, they often end up in the hands of bad actors who use them for crime or terror. On the other hand, they are a convenient and powerful way that the US can support causes quietly without having to commit troops. This is happening today and will continue to happen until we can decide on a more convenient and powerful way of helping out our proxies as they face off against our foes.