It doesn't really matter what you do with the grapple while winching. The cable does not run through the grapple. it comes out of the base of the tower that the grapple mounts on. Not much to see when looking at the cable hooked to the log: I use a chain choker on the log. The cable has a grab hook on the end which grabs the chain. I never use the hook on the end of the cable to make a loop with the cable around the log: that's a great way to chew up the end of the cable.
I've put these up before, but if you are interested in seeing a bit of the choker, you can see it here when I was winching out some small logs at Little Hogback Community Forest with the logging winch on my tractor. (The only real differences between this and the winch on the trailer are the speed and the fact that the tractor logging winch has a keyhole on the end of the cable, rather than a grab hook (The keyhole is much less likely to lose its grip on the chain when pulling over rough terrain than a grab hook is.) The choker explanation nd close up starts at around 2:45.
Winching small logs at LHCF - YouTube
For a bigger log, and a better quality video, see this video:
Winching log 2 at LHCF - YouTube
This was set up mainly as a demonstration fr some folks who had not seen any of tis equipment before. I probably could have just driven down that path, though the sidehill is a bit tricky, especially if you hit a stump or a pothole. With the tractor winch, I could have pulled several of those larger logs at once. With the winch on the forwarding trailer, I'd probably just stick to one large log at a time.