If I set the CBActivity > Parameters > Notifications > Email on. and I set CBActivity > Parameters > Notifications > Notify > Activity > Create to Disabled, then no email is sent.
That's as expected. You turned off the notification. The email parameter sends an email FOR the notification. It does not replace the notification behavior.
But if I turn it onto to Enabled then it sends to everyone. My choice there is "All Users" "Connections" "Followers" "Moderators" - but I'd like the emails to be sent to the GJ Group members only.
That's because you turned on a generic notification. That notification has nothing to do with CB GroupJive. That notification is for any post on any activity stream.
As explained earlier if you just want a notification for GJ activity posts you just use the "Create of new activity post" notification within your groups. That's the purpose of that notification. Nobody is going to receive a GJ post notification if they don't toggle that notification on.
So you should turn off CB Activity > Parameters > Notifications > Notify > Activity > Create. Then your users can toggle on the "Create of new activity post" within their groups. You don't need to do anything beyond that. GJ will send an email (this is confirmed working) for the new post on the activity stream.
This can be taken further by letting CB Activity override the GJ notification behavior. To do that navigate to CB Activity > Parameters > Notifications > Notify > CB GroupJive and set Notifications to Replace. Next navigate to CB Activity > Parameters > Notifications > Email and turn on emails. Now GJ notifications will be logged into CB Activity and send an email for each of them. Whether you do that or not is entirely up to you. It's just another option available to you.
I don't really know what more to say. GJ notifications are entirely handled in GJ now. There isn't this weird disconnect where CB Activity handles some and GJ handles some. Latest CB Gallery and CB Activity releases moved those notifications properly into GJ.