Symptoms
Searching for SharePoint groups within workspace finds nothing...
Diagnoses
Process gets SharePoint group members and uses them as destinations on activities, however this does not work correctly as it is not able to find the SharePoint Groups.
When a particular group gets searched for, or any group or user on the SP label, nothing appears from everyone.
When executing the UMGroup Smart Object within the tester tool this appears to work correctly.
Resolution
Have a look at the HostServer.GroupProvider table located in the K2 DB.
Please do check to see if a group provider corresponding that URL in the log file appears here and remove this. Before doing so please do a back up of your db before hand for safety precautions.