Within 2 yards/meters at 1700 yds/1555 meters accuracy would be about within 10 meters at 8 km. Under more adverse conditions that would seem to be outstanding.
From the USMC manual on Tactical Deployment of mortars:
a. If a 60-mm mortar round lands within 20 meters of a target, the target will probably be suppressed, if not hit.
b. If a 60-mm mortar round lands within 35 meters of a target, there is a 50 percent chance it will be suppressed. Beyond 50 meters, little suppression takes place.
c. If an 81-mm mortar round lands within 30 meters of a target, the target will probably be suppressed, if not hit.
FWIW
A 120mm proximity fuzed round within 25 meters on the first ranging round would probably be quite awesome.
I would think that such a device with a “second stage” like an RPG at the zenith of the trajectory would make a super tank killer (the tops of tanks are not armored as well).