Going on what Mitchb said first:"
What's happening is the original geometry created before the grouping and saving is being kept so you can "Undo" back before the last save, all the way back to the first circle if needed. This is a feature not a bug.
Perhaps it's -meant- to be a feature, but it's still not working consistently.
When I start a document and make changes, the things I deleted are -INVISIBLE- to me. For all intents, they are gone. But yes, I can go back and undo all the way back to the beginning or however far back that audit trail is saved.
So, if I save my work, close the document and come back later.. when I saved it, those items that are held in the undo history for me are still invisible. That is they are not anywhere where they will impact my drawing. If I select that group, I get that group. Period.
Now I've reloaded that document and when I go to select that group I am prompted if I want to select that or one of the circles that are hiding under it.
Those circles are -HISTORY- items, not items in the present. They were not visible, manipulatable, selectable, or ANYTHING right before I saved it. Why should they be anything more right after loading the document again?
The document should be reloaded in -EXACTLY- the same state it was saved in.
No extra layers created, no items suddenly re-appearing, even though they are completely hidden by other objects. None of that. The application should not be modifying the state of the document at all.
No other application does this. Some may indeed save history along with the document so that undo's are possible prior to the document state during that session, but those changes are not suddenly visible.
Take your own wording and apply that to a Word Processor document. If I were writing something and replaced the whole second paragraph before I saved it, yet I can UNDO back to that original second paragraph. Now when I reload that document, would it be acceptable for me to find the original second paragraph text visible again?
In Photoshop parlance, the history of edits is just that. History, and not visible ever again unless specifically called on. Save it all you want. But not make it visible.
To be honest, I never realized that the ability to undo past the point of which the document was last opened, and would have not even expected it. In that regard, V6 works exactly as to be expected. Without selecting "Clear Undo at Save" to gain that behavior. OTOH, V7 needs to have it selected, so that negates that issue for me, but it does not solve it.