There has been an update that I have seen in Office 365 in the options you get when trying to share content. Previously when sharing something, you had the option to select a permission level and put the user(s) into a specific SharePoint Group.
The sharing process has recently been updated. In newer tenants, mainly first release that I have seen, you will no longer see the select a permission level option when sharing from top right site share or the library level share.
In a support case with Microsoft it was stated that “the feature of displaying groups on the sharing options of a site is deprecated and will no longer be available for the tenants which are on the newer versions. The reason for the deprecating this feature being, it is complex to show different set of permission levels set on each of the site collections and subsites considering unique permissions set at each web level.”
However I was able to still find the option to pick a group when using the Grant Permissions option under Site settings -> Site permissions.
When you click the show options section you will see the select permission level section. In that drop down select More options.
You will then see the list of groups and permissions levels again.
It is always interesting finding these unexpected changes. This wasn’t a huge deal as we found a work around to get users into groups but this did disrupt a client’s business process until a resolution was found.