It seems, that GroupLayer's MinScale/MaxScale properties are ignored.
When I'm setting GroupLayer's child layers scale dependency - it works as expected.
But GroupLayer-level scale dependency doesn't have any effect.
Is this a bug?
We noticed that the min/max scale was not working on a DynamicLayerInfo when the Spatial Reference of the Map was WGS84. It works correctly if the Spatial Reference is something other than WGS84. I know your issue is related to a GroupLayer, so just as a check you might want to try different Spatial References for your Map and see if that has any effect.