Adding "Sicily" to my Google Scholar search ("POW italy sicily parole") lead me to https://www.tandfonline.com/doi/abs/10.1080/07075332.1996.96... behind a paywall. Here are the relevant sections:
> However, after the conquest of Sicily, Eisenhower did parole thousands of Italian soldiers captured during the campaign to help the Sicilian farmers bring in the harvest. In July 1944, the parole scheme in Sicily was cancelled: all Italian prisoners on the island were released at the end of the month.
Granting parole was a morale issue in the UK.
> Harold Macmillan, the minister resident in Algiers, passed on the foreign office's fears to Eisenhower, who replied that a statement of the 'true' facts might soothe the British public. If they were told of the military advantages to be gained, and that the Sicilians, who were only out on parole, could be re-imprisoned at any time, they might be less offended by the 'soft' treatment of a defeated enemy who had yet to release any of its British prisoners.
Earlier I quoted an example of Germany paroling Dutch, Flemish and French POWs because of the large number of POWs. The same thing happened in Tunisia and Sicily:
> After the Tunisian and Sicilian campaigns, the numbers of Italians surrendering forced Eisenhower to parole them almost as soon as they were captured.
Another mention of "parole" shows "troops captured on the Italian mainland" were also paroled:
> These post-war comments merely serve to highlight both the confusion on both sides immediately following the surrender and the continued paradoxical position of Italian servicemen. Whereas troops recently captured in North Africa were being used for war work, soldiers in Britain employed on the land, and still others held in camps in the Dominions, many of the troops captured on the Italian mainland had already been paroled by Eisenhower and allowed to return home to work in liberated areas. If this was not complicated enough, some Italian army units which had not been captured were nominally fighting alongside the Allies against the Germans.
Lastly, it looks like your grandfather was a POW late in the war.
> In this unorthodox fashion was decided the fate of several hundred thousand Italian prisoners. The lucky ones, captured later in the war, were paroled soon after their capture. Many of them soon returned home and some even fought alongside the Allies to liberate their country from the Nazis. The rest, some of whom had been captured as early as 1940, remained prisoners until the end of die war in Europe in 1945. They worked on farms, on roads, and in factories as civilians, and in the rear of the Allied armies as ancillary troops. Their misfortune was to have been captured too early: to have become too useful to Allies short of manpower and willing to stretch to the limit the boundaries of international law.
The paper is by Kent Fedorowich and Bob Moore. It looks like Moore has written several papers on this topic. Try "Enforced Diaspora: The Fate of Italian Prisoners of War during the Second World War" (start from Google Scholar, search for that title, then follow the link to sagepub.com , as otherwise you'll hit the paywall).
That has details like "This embarrassment of riches led Eisenhower to disarm and parole 61,658 officers and men of Sicilian origin to help with the harvest".