I have this same issue… I reported it as a User Manager issue a while back (User Manager Contact Group no longer shows in Phone Apps Contacts)
But it seems this is more of a Rest-Apps issue.
I didn’t realize that the problem only occurs like @mag mentioned… when I use a soft key programed to the XML-API: REST-Contacts then go to the Contact Group I get “Cannot Display” … but if I go to that same Contact Group by going to the XML-API: Rest-Apps, then Contacts, then the Contact Group it shows fine.
Also this only occurs for Contact Groups that are in the FreePBX User Manager Group, not for Contact Groups in “Internal” or “External” groups.
I recreated my User Manager group as an “Internal” contact group as a workaround. Not ideal but it works.