Hi Bakhtawar,
I have tested this behavior in house and it seems to be working as per OTB behavior. Below are the steps I have followed to reproduce the behavior, Let me know If I have deviated in any step that you might want to correct me
1. Logged into SDM (17.1 + RU02)
2. Created a ticket and noted the assignee is already filled with service Desk account
3. Edit the group filed to add a group - Failed to get a group
4. Cleared the assignee filed value(empty now).
5. Selected a required group - Successful
6. Assignee lookup gave me all the assignees that belonged to that selected Group.
Note: Verified the behavior on 14.1 (Latest RU2 Patch Level) and I see the same exact behavior as in 17.1