I lived with a "high-tech" composting toilet for over a year. (Joking) It was a five gallon bucket that slid under a 2x4 frame that had a toilet seat attached.
I was living off-grid and had a large garden, and composted a LOT. I had a humanure pile (a four foot cube of cinderblocks) which was separate from the garden compost pile, so all waste was re-cycled, not thrown in a dumpster. I also threw my weedy/seedy yard waste in the humanure pile. Although I have never heard of using coffee grounds before, I can venture an educated guess as to why it would be used.
Compost requires a ratio of "greens and browns" to decompose. The higher the brown ratio (sawdust, sticks, cardboard, dried leaves) the slower and cooler the composting will happen. The higher the "greens" ratio (grass, vegetable scraps and materials with a high nitrogen-content) the faster and hotter the composting will be.
I have no experience with any commercially made composting toilets. I have read a bit about a few, and know there are several methods they employ, (dry, wet, churned, containerized, incinerated etc.) but not knowing your exact model/setup, I am just volunteering my personal knowledge of composting in general.
I personally would not want the composting action happening indoors for various reasons. (fire being one with a 'hot' pile, which would be unlikely with a small container -a few gallons- that is frequently churned btw)
The only reason I can see for the coffee grounds is the high nitrogen factor. It is a great starter for a "cold" compost pile. If the sawdust humanure is truly being used for compost, it will speed up decomposition, a lot- depending on the ratio. Generally speaking, without adding greens, the humanure will not be ready to use for two years or more. I added a lot of greens to my pile because of the added heat it creates, which can kill a lot of pathogens and seeds. My pile's volume decreased by more than half within months of adding a mass of green yard debris. Also know that a higher urine content will slow down a working compost too (this is true of pissy horse manure from mucked out sawdust stalls too)
On a slightly different note-
With the bucket method, emptying every few days into a nearby compost heap, you wouldn't have to worry too much about totally drying the grounds. Just storing them in a jury-rigged strainer of sorts would be sufficient, as long as they aren't dripping wet.
I did empty my bucket every few days, not because I had to, but because it was easier to carry a partially full bucket. I also did not need to use a liner, because I was not dumping into a public trash receptacle. Always start with a base of sawdust to keep things from sticking. A toilet bowl brush (kept at the compost pile) will knock off any moist sawdust. Alone, I could go ten days to two weeks before I _had_ to empty the bucket, but twice a week was easier for me.
I plan to use a similar setup when I build my conversion. While on the road, I will use liners if there is no composting available, otherwise, I think I will utilize the addition of coffee grounds with the sawdust should I be wild camping with a cat-hole for disposal purposes- i like the idea of speeding up the process under those conditions.
fwiw, i also plan to employ some sort of urine diverter as well. Those details remain to be decided though.
I will say, the smell is less than a regular toilet UNLESS there is a high volume of urine- which smells even worse when multiple people, especially a mix of men and women, use the same bucket to pee. (Keg parties come to mind