I have a kinda large password database (about 50 groups and 200 entries). When I want to create a new group it doesn't happen. Instead a new entry may be created somewhere inside database tree with the name of the group. (That is I'm able to create a new group, but when I press Enter to confirm its name, the things described above happen.) This happens with Password Safe v3.28, but I first noticed this some time ago (around v3.18, maybe later).
Please note that some entry names contain period "." and space characters.
I'm still able to create groups by specifying their names in new entry dialog like SubGroup.NewGroup.NewEntry.