RAW may be unclear, RAI is not IMO and I think
@Sarkazym made some excellent points about the consequences when interacting with other special rules.
What makes Rapid Fire troublesome is that both interpretations are RaW, which I haven't found a way to express that until I took a step back and saw it. I'm seeing and hearing both sides of the debate, and we're all struggling with a RaW creating a situation where both interpretations are correct. Both sides are playing the RaW, and both sides are House Ruling it to support their argument.
When applying the Rapid Fire hits as part of a Shooting attack or a Close Combat choice, neither side is breaking RaW because HOW the hits are assigned are a choice made by the player. When it comes to Combat, we aren't breaking the RaW because we would never CHOOSE to distribute the Rapid Fire hits to models we didn't assign any attacks with the Rapid Fire rule to. There is nothing forcing us to like Reckless. The other side is not breaking the RaW when they assign the Rapid Fire hits to models that aren't affected by the initial attack. No House Rule is needed at this stage by either side.
Since assigning the Rapid Fire hits, the debate boils down to WHY the individual player wants to assign the Rapid Fire hits. On our side of the debate, because we choose to limit the Rapid Fire hits to the assigned model for practical, realistic, tactical, or even thematic reasons, we're going to pull a TFG move and House Rule it to where all players now have to play the same way. Choosing to assign the Rapid Fire hits to models not assigned the initial attack is still RaW because the rule doesn't accommodate the differences between Shooting and Combat. It remains sketchy for all the reasons listed, so those on that said are going to pull a TFG move and House Rule it where it is legal. While this is problematic for us to accept, it doesn't restrict us from playing it our way anyways.
In reality, regardless of which House Rule the Arbiter goes with, I doubt that even as a community, we'd ever see enough of this situation even occurring to get a sample size large enough to see the stats on it. The chance that the all of the variables are in place to even be able to pull it off are pretty astronomical. The S3 Ap- hits on the Autopistols are going to reduce the odds that spreading this hits are going to inflict a Serious Injury are even less, and that is with the most commonly available weapon with RF that is useable in Combat. The Sword mentioned wouldn't even dent the stats. Where the outcome of the ENTIRE game is dependent on that roll makes odds of winning the lottery look good.