A group mode is where you select a couple of fighters, lets say four, to compete against another 4.

I really hope Im right. Peace out.

but why always it selects kai. and why is only activated when there's a second player?(u know the option that is between hidden and random)

Group mode is used to get the secret character "Meat". Use group mode, and each time you win a match select group mode again and it will select the next person. Do this until it has selected everyone, and then pick a character and it will be "Meat"