Would you not expect the user be taken to the location of the new group rather than the location of a group that no longer exists?
Just to be clear please can you confirm this is expected behaviour (I imagine a similar issue to the above):
1. Create a new group located beneath the "Site Root" Parent Group.
2. Save the group.
3. Edit the new group's settings and change the Parent Group location from "Site Root" to a different group.
4. Click save and you receive the 'Group Not Found' error.