Light groups are cloud based, the virtual switches with automations are local. And maybe the group cannot be created if it’s only one device.
They are apparently making light groups local but at least for me does not work so I still try to avoid them: Hub Firmware Beta Group | Local Execution for Lighting Groups is Ready for Testing - #10 by mocelet
However, since the purpose is using the app and the app is cloud based anyway, I’d say it doesn’t matter.