I just signed back in to my developer account for this post. I am see this as well on the final release. I tried wiping both phone and watch with a fresh start, same thing. Grouped on phone fine, not on watch. However, one thing I did notice was that all those who was separated out had iMessage and those still in a group on my watch did not. So it's not all people in the group. My thought was it is iMessage on watch. I turned off iMessage and sure enough all of the group responses are together again. Just wanted to post this somewhere visible as online searches led nowhere.