The UI is confusing because of the names it uses.
Think of groups as roles. You have created the two groups/roles. Next to assign permissions or rights to those users on a location basis you use the sharing tab on the particular folders. You would also first have to ensure the folders and the contents are “private” or another state thats not visible to who you don’t want it visible to. Then you modify that visibility to elevating those “view” right to those particular groups.