There were no groups, but types instead. Where a user could only be one type.
One could argue with the "new" layout, that if other packages - even by HQ - can add a custom tree to the section, Umbraco should also support this. I agree that it seems a bit off that User Groups isn't also part of the tree.
I understand why, because the user section uses the content app-style layout to separate the users and the users groups. But I also found this part a bit weird when they did the rewrite.