I got it finally. Sweet!
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@jonallsebrook, Just go into the group (which are now rooms) and remove all the devices then delete that group/room (if you want). You should now see all your devices available.
I had a group called doors. I went into that group and removed all the doors from it then deleted the group (since thats not how I want things organized now). I did that for all my groups, then created a new room called Kitchen and all my devices were now available to assign.
Make sense?
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Thanks gonna give that a go
To change the mode manually you’ll have to use a routine.
Ok. Thanks, at least I know that I am not going crazy because I couldn’t find the option anywhere. Most of my modes had routines anyway.
Go into the group/room, and click the 3 dots on the top right, click Edit Room, click “Add/Edit devices in this room”, and click the red minus to remove them. Click Done and then you can delete the room if you want.
Ok so remove room works… Did I miss some documentation or announcement that I needed to do that or am I just dumb…
Another deprecated feature from 1.7.x?
No rush… but love to have an explanation, please, if you wish. Why remove something that was rather convenient (but perhaps underused…)???
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Yeah I was wondering if you could just remove the room without manually removing each device first. I did not read it anywhere but just figured it out by playing around. It makes perfect sense once I realized what happened 
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I’d like to see the “if you had groups, they will now appear as rooms” with an explanation of what to do next added to the “how to migrate” page because I really don’t think any of those specific steps are intuitive.
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I am going to assume that ST decided to just simplify the UI a little and ensure that all actions go through routines or smartapp instead of before with modes, HelloHome actions and smart apps. I personally don’t see I as a big deal. My favorite feature so far is the fact they got rid of the categories for Smartapps which made it awfully confusing to find apps. Rooms of course is nice, but in reality we had it before as Groups in Things.
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Nope. . .no app update in the play store.
Trust me it’s not intuitive at all but now I have it sorted loving the new layout and my wife will find it even more easier to use!
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Ahh yes rooms is great but not obvious on how to change it!
Working on getting this added
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So far I’m not super impressed, especially after waiting this long. Haven’t spent that long playing with it or customizing it (waiting for v2 rebuild) but;
)Color scheme has poor contrast in most places.
) Things alphabetized, SmartApps are not, and no way to adjust sorting.
) Family shows presence sensors that weren’t setup to be people.
) Still laggy.
Actually this is relevant whether staying on v1 or moving to v2 as its app specific
And of course you will have to have a “miscellaneous” room for devices not tied to a room. 
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Sorting on the full Things list is coming in an update very soon.
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Yeah my rooms are now seen as a device when editing a room