In a new admin account, at first, it didn't work. After I changed the settings to "group immediately", that worked. Then, when putting back to wait 1/3 sec, it also worked fine.
Went back to my account. Changed settings to "Group immediately". That worked but with a small issue. The txt file grouped, but while dragging, it didn't show a preview of the "snap", like it should before you release the mouse from dragging. But when I just released the mouse anyway, it grouped.
I then put back the setting to 1/3 sec, and text files won't group at all.
So to summarize:
I don't mind leaving on the setting to group immediately.
So the only issue remaining is that while dragging a txt file (word and excel are fine), there is no indication that the snap is about to happen.
It's also something I can live with but if you have a solution, that would be great.