The "Group with Undeposited Funds" preference doesn't apply in the Bank Register

The Group with Undeposited Funds option isn't available in the Bank Register window.

If you want to record a transaction in the undeposited funds account, you must enter or select the account in the Deposit to Account field.

Even if you selected "When I Receive Money, I Prefer to Group It with Other Undeposited Funds" in the Banking view of the Preferences window, you must select the Undeposited Funds account in order to apply the transaction to that account.