You have CB Activity > Notifications > Activity > Create enabled. This means you can't enable CB Activity > Notifications > Activity > Create (Group) specifically. CB Activity > Notifications > Activity > Create notifies on every post and you've it configured to notify followers. The following will ensure only groups are notified. You likely don't need to be using the full global notifier.

CB Activity > Notifications > Activity > Create = Disabled
CB Activity > Notifications > Activity > Create (Group) = Enabled

That will notify only group members when you post in a group. If you want profile posts to notify followers then use the following notification instead of the global notification.

CB Activity > Notifications > Activity > Create (My Profile)

Please be sure to read notification descriptions carefully in their tooltips as they explain when they're triggered.

The notification has be subscribed to. Just like any other GJ group notification. This functionality existed before CB Activity 6.0.0 and it's checking the same group notification that the CB Auto Actions usage did. Navigate to a group and under its menu click the Notifications link. That's the notifications page for that group. You should see a notification there to be notified of new posts. If you enabled the group gallery notification it too will have a parameter there as well.

I'm also not understanding how to create a notification for replies?

Replies to what? Replies to comments? There's a comment notification for that. That's not going to be group specific.

Will review your configuration tomorrow. I've no idea what's going on with your install, but none of this can be replicated in tests or on our demo site. It's possible there's a configuration combination I'm just not account for. Below are the new notification parameters added to groups. Both are visible on our demo site.

 

They're toggled on by toggling on those respective notifications in CB Activity.

 

That's basically all there is to it. There's no other further checks for those parameters. Please be sure your install is completely up to date with latest build releases as maybe GJ itself is out of date?

Am I right that the comment setting is on the right under Activity and Create, but the Reply setting is on the left under Comments?

Please read the descriptions. They tell you exactly what those notifications are for. The Comment notification under Activity is for comments on Activity. If you want comment replies to send notifications then enable Replies notification under Comments. Replies are not specific to an activity entry as they are replies to other comments. That will apply to all comment replies globally. There is no notification for ONLY activity comment replies.