I tried to put a grill indoors once before recolors because I had a black kitchen and the white stove didn't match and I didn't want to resort to the cheap and crappy black stove. I quickly learned the hard way grills indoors always = fires.
One interesting thing to note is that this doesn't apply to community lots, where fires apparently can't happen, and you will even notice some grills indoors on some Maxis community lots like the grocery store downtown in NL for example. I suppose to get a grill to work indoors (or what the game thinks is indoors) on a residential lot you could always do the changelotzoning community cheat. Just make sure you do changelotzoning residential before you save and exit.