The database listings do not update when you change to a different group in the drop-down field. You have to refresh the page to update the view, which is incredibly annoying.
To reproduce this bug, do the following:
1) Create two groups, A and B, into your test course.
2) Create a simple DB activity with one text field. Make sure "Separate groups" mode is being used.
3) Select "Group A" and add an entry to the DB. Do not add any entries for Group B.
4) Filter the DB using the drop-down by selecting "Group B". An entry will still appear even though there are no entries connected to this group. Refresh the page manually and the DB will display a "No entries in database" message, which it should have done in the first instance.
Oddly, defining group mode at a course level ( Course administration > Edit settings > Groups) eliminates this refresh issue!