Error – “Please make sure to select a group using the autocomplete field.”

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I am trying to create a folder with privacy preference as “Restricted to a group”, but it fails with the error message, ‘Please make sure to select a group using the autocomplete field.’.

When I try to type a group name in text field, it does not show any autocomplete options although it does work fine with “Restricted to members”. So I have typed group name directly, but it still throws the same error. BuddyPress Groups are all set and having members as well. Not very sure what is missing.

Any advice would be much appreciated. Many thanks.