So, the way combos in ME 2 work is that they have two components, a primer, and a detonator.
Whenever a target currently affected by a primer is hit by an eligible detonator, there's a chance that explosion occurs based on the specific combination of effects in play. For example, Biotic Charge is capable of detonating all four varieties of combos. If a target is hit by Warp first, which acts as a primer, a Biotic Combo will trigger, which explode in an area effect for decent damage against health, barriers and armor. Biotic Combos are also notable in that they are the only Combo that triggers 100% reliably, regardless of the health of the target. Others may require a killing blow, or a fair amount of luck.
If instead of charging a target affected by warp, we had charged a target that had been set on fire by Incendiary Ammo, we'd have a chance of triggering a Flame Explosion, which will set victims on fire, causing organics to panic.
There's a whole variety of combinations that can produce one of four types of combos (Biotic, Flame, Electric, Cryo), so experiment!
With regard to the various Detonation upgrades, they specifically effect combos detonated by that power. As a result, they are incapable of stacking.
Squadmates will not run out of ammo, however, the upgrades to ammo powers that increase capacity do carry over with the squad ammo powers. What does that mean?
It means that if you take the increased capacity upgrades for squad members that you intend to use a squad ammo power with, Shepard will benefit from it.
Additionally, upgrades that effect clip size rather than total capacity will result in your squad members reloading less often, and by extension, higher damage output.
Best Answer
Yes, squad members benefit from the weapon master upgrade. Remember though that the squad bonus skill grants squad members that ammo at only 50% effectiveness. Therefore squad members ammo increases by 20%, not 40%.
The Bioware math explanation can be found here.