Groups should be creatable without requiring a thumbnail. I should be able to add it later and there should be a default thumbnail.
Just like other elements of the Group, like ranks, description, etc., I might not have an image ready to go at the moment I want to create the Group. Having to pick a unique name is enough burden up-front when kicking off a new project.
The workaround is I download/create a specific placeholder image (e.g. create an empty all-white .PNG) just so I can pass the creation gate for now. This is after spending ~30 minutes deciding on a new Group name.