Yes. That is one use for Groupings. That is the main use that I see for groupings in my k-12 school district's Moodle. Many teachers use Groups to manage multiple blocks/periods of one course. In order to use the "Students submit in groups" feature of the Assignment activity, the teacher sets up "project groups" (Block 1 Group A, Block 1 Group B...Block 2 Group A, etc. Those project groups are then added to a Grouping (Project Grouping). That Grouping is indicated in the group work options when setting up an Assignment.
One thing that I am curious about - if a teacher has such a collection of groups set up in grouping, uses that grouping in an assignment for group work, grades the assignment, and then changes the membership of each group for a new assignment (rather than continuing to create new groups) - does that affect the grades on the previous assignment?