I noticed a very peculiar issue while using the new assignment grader. We upgraded from Moodle 2.7 and the previous assignment grading interface did not have this problem.
Basically, my understanding is that if student1 and instructor1 are both only in group1, then instructor1 should be able to view and evaluate only student1's submission. We have been operating in this way for a few years on Moodle 2.7
In the new assignment grader, the groups are being recognized correctly as you can see in screen1 (attached). The filter shows the correct number of students assigned to the instructors group and if we use the "left arrow" and "right arrow" buttons then there is absolutely no problem in navigating through the students assigned to a given instructors group.
However, there is also a drop-down option as seen in screen2 (attached) which displays a list of students (belonging to different groups) and the instructor can select any of these and enter a grade (even though they're not a part of his group). The assignment is already setup in separate groups mode.
Can you please let me know whether any of these are possible (for an immediate fix):
(i) disable only the the drop-down option in the new grader (through settings or permissions)
(ii) disable the new grader and revert to the old interface
(iii) disable only the drop-down option in the new grader with a code-change