When grabbing, we use lao gong to connect. So wrist and fingers have to be relaxed to make connection.
When being grabbed we use the feeling/kimochi/energy/whatever you name it, doesn't work through the fingers, but from my arm into the grabbing hand (maybe lao gong there). So wrist and fingers have to be relaxed to make connection.
(just to add: Endo does never use the term "lao gong" but just talks of the "palms".)
The only teacher who I have heard mention "lao gong" is Kanetsuka Sensei, though I don't know where he originally learned about it. He has talked about the connection between the point between the base of your thumb and base of forefinger (is that what Endo means by it?) and the hara - it seems that according to Chinese medicine there is a strong connection between the two.
He also describes the correct sword grip as one where the lao gong is lined up with the top of the sword, and this way power is most efficiently delivered to the cut.
Incidentally, I remember Endo Sensei talking eight or nine years or so about controlling your partner's thumb through their grip, which I have thought about a lot since then. I wonder whether that is a lao gong thing too.