In addition to Windows Snap, it would be great it groupy also worked with the new Windows PowerToys FancyZones.  Ideally the groupy window that has the tabbed apps inside would resize to fit in the zone.  If a normal window was snapped in a zone already, and another app is dragged into it to create a groupy, the window expands to fit the tabs.  If it resized the apps to make them smaller to account for the addition of the groupy tabs at the top, then that would be better.  This behavior could be an option. 

Uninstalling Groupy until this is fixed. I won't be recommending the software at this time.

Are you dragging windows by the titlebar or by the groupy bar?

If you drag by the real titlebar it should work ok with the OS Windows Snap feature.

FancyZones may be different however as it is not a core OS feature.

Well, I MAY have found the answer.  At least the answer I needed.  It seems to be working now.  I played around with the settings in FancyZones which mainly included turning on and off again the "Show Space around zones" button.  I think the trick is that this time I had three Groups already created with multiple tabs prior to turning off the "Show Space around zones".  Previously, I had turned it off and then created the Groups.  So probably still a bug, but at least it seems to be working now.   

If it continues to work, I think you'll have a sale!  

Snap seems to have a mind of it's own for me!  I love the ability to tab file explorer but often I like to snap 2 file explorer windows next to each other on my 2nd monitor.  Usually after multiple tries it will finally work.  Sometimes (like today) it will never work.  Very frustrating!