Group by status icon makes a new group for each item even with the same icon in 12.7 instead of grouping them together as it did in previous versions. Could be related to the status icon changes in the latest versions.
A picture says a thousand words:
Hmm, i am quite sure, this has been fixed a few versions ago. But maybe it sneaked in again somehow?
Will this be fixed again in the next beta? Or could GP provide a link to the last version, which still had this fixed? I wonder, why there is no reaction, when we report a bug.
This has been fixed for the next update (12.7.1 and 12.8).
Temporary workaround for 12.7: Turn off Preferences / Folders / Folder Display / Show OneDrive status icons in the Status column.
As per your thread, Strange behavior with grouping, it was reported just as 12.7 was being released so we could not fix it in time for 12.7, but the fix will be in 12.7.1
Thanks a lot. 
klonk
Edit: by the way, that would explain things. Recently i played around with OneDrive, & i think i've had that setting changed.
Case closed then. Thanks for fixing it.
