We have come to belief that the function that determines who should recieve a notification to grade a submission (/mod/assign/locallib.php:get_graders())is too broad.

When using an activity in SEPARATE groups mode the function currently identifies potential graders as users who hold the grader capability and are in ANY group with the submitter in the course.

We believe that this may be an issue.

We have spent a while talking about this and feel that the groups_get_all_groups() function should also pass the activity's groupingid value so that, if a grouping has been selected, the potential graders are restricted to users within the activity's grouping.

This should be a case of simply changing the line to

if ($groups = groups_get_allgroups($this->get_course()->id, $userid, $this->get_course_module()->groupingid) {

Like I said we have spent a while talking about this and we can't see the reason why this works the way it does, so we would also welcome someone explaining why it is the way it is!