As I rather thought your user group allocations seem to be fine. Very simple in fact.
I don’t know how much you know about the way WordPress works and communicates with plugins but put simply, it uses an extensive array of ‘hooks’ that, in effect, send out a message that a certain action has taken place. In turn plugins ‘listen’ for the message and take their own action on receipt of it.
This can break down if a plugin – designed to replace a core WP function – fails to send out the messages. And we have encountered this behaviour before including new user creation from within BuddyPress. Although to be fair this was a while ago and not in MS.
I would suggest you perform a simple test. Create a new user through the regular WP ‘Add New User’ admin panel where SP is installed and see if that member is created in SP and assigned correctly to the chosen user group. This should function correctly as it does for us and our users including those running MS.
Assuming it does correctly create the new user – and I will assume nothing at the moment! – then you really need to ask the BuddyPress team if their code is firing the correct hooks on new user registration. For reference, SP ‘listens’ for the following hooks to be actioned:
‘wpmu_new_user’, ‘wpmu_activate_user‘, ‘added_existing_user‘ and ‘user_register‘.
Perhaps we can start to get to the bottom of this…!