3
It seems like this is the intended behavior. Clicking the "Find users for this group" link does allow you to search for users and add them into the group, but it doesn't filter out users that are already in the group, allowing you to add them multiple times. That can't be good.
The correct behavior, since we are intending to add users to the group, would be to only include users who are not currently in the group. The current situation makes the management of groups with many users to be very difficult.
Dennis