By Default, items in a SharePoint list can't be grouped by a Choice field if it allows multiple selections (checkbox).
To be able to group by the value of a Choice field in a SharePoint list or library which allows multiple selections, you need to ensure that the Choice field/column is set as Radio Buttons or a Drop Down Menu. Both of these options only allow a single selection of the available choices, which is required to allow grouping by the column/field using Standard SharePoint List views.
To group by a Choice field which allows multiple selections (checkboxes), convert the Web Part to a Data View using SharePoint Designer, then apply grouping doing the following:
1. From the "Common Data View Tasks" menu for the Data View Web Part, select "Sort and Group:" from the options to open the Sort and Group Dialog, add any field into the Sort Order section to activate the "Edit Sort Expression..." button. Click the "Edit Sort Expression..." button to open the Advanced Sort Dialog.
2. From the list of fields, add the Choice field, and make sure that the field reference is the only value in the "Edit the XPath expression" input.
The field reference should begin with an @ symbol followed by the internal name
of the SharePoint column/field (example: @Location). The value from the
selected column will display in the Preview box if items in the list/library
match the specified criteria, which in this case is a simple column/field value
(no conditions or calculations required).
3. Press OK on to close the Advanced Sort Dialog. Select the Choice Field from the list of fields in the "Sort Order:" box, then select "Show Group Header" under Group Properties. This will result in items being grouped by the value in the choice field which allows multiple selections.
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