Ed, the BCG vaccine for TB has been around since 1921 - it was developed in France. 

It can, as you said, increase the likelihood of a false positive to the "scratch" or "tine" test for TB and require blood testing for TB and chest Xrays to make a firmer diagnosis. There is another issue, however, and that is that the BCG vaccination can result in scarring at the dermal injection site, and possibly even larger ulceration in the arm around the injection site. Records show that sometimes a pustule can form and persist for weeks around the injection site. This is a high level of side effect for a vaccine that is, through clinical testing, shown to be only 51% effective in reducing the incidence of TB.

The CDC recommended in the 1990's that the vaccine be considered only for young children with issues of exposure and health care workers who might be exposed to treatment-resistant TB. It isn't on the schedule of vaccinations for military personnel any more, even tho TB remains one of the most common communicable diseases in Vietnam and other places in southeast Asia.