Worked perfectly fine for me on the demo site. If you're trying to give a usergroup you don't have permission to give that might be why it's erroring. Try giving Author, which worked fine for me when giving to andrea.
Please provide the steps you took to reach your issue. For example what usergroup to what user and if multiple please also provide usernames for each since this is happening on the demo site for you. This is all very important for me to reproduce, track down, and fix the issue.